JPMorgan lowered Nutrien (NYSE:NTR) to Neutral from Overweight, cutting the price target to $58 from $70 per share in a note to clients on Monday.
Analysts noted that NTR's EBITDA "continues to make its way lower, as a base case from the peaks reached during the early days of the Russia/Ukraine conflict."
"The potash market is more loose, and potash tons are being added by producers in Laos, Russia, and Belarus," the analysts explained. "Grain prices have moved lower: corn was $6.50/bu a year ago and is now closer to $4.75/bu. The stocks-to-use ratio in corn was just above 10% in 2022 and is now above 15%."
They added that 2024 is likely to be another year of more than 90m planted acres of corn in the US, "which, as a base case, can lead to a further slackening in corn prices," while corn and soybean seed pricing has "flattened out."
"It appears that there is pressure in crop chemical values because of lower grain prices and more plentiful chemical supply," said the analysts.
They also stated that Nutrien’s share price tends to trade directionally with the domestic corn price, adding that the investment bank considers that consensus estimates for Nutrien in 2024 are high.