Last Update 07 Dec 25

Fair value Decreased 2.84%

MOS: Strong Harvest And Deferred Demand Will Support Future Upside

We trim our Mosaic fair value estimate by approximately $1 to $34 per share, as analysts broadly lower price targets in response to softer near term fertilizer demand, weaker phosphate volumes and margins, and higher expected input costs, partially offset by selective optimism on execution and harvest driven demand.

Analyst Commentary

Street research on Mosaic has turned more mixed as analysts recalibrate expectations for fertilizer pricing, volumes, and input costs. While most price targets have moved lower, views on the stock's risk reward remain divided, with some seeing upside from execution and cyclical recovery, and others focused on rising costs and softer demand.

Bullish Takeaways

Bullish analysts highlight that near term weakness is partly a function of demand deferral rather than structural decline. This suggests deferred volumes could support a recovery as farmer budgets reset and credit conditions stabilize.
Several updated models still support Buy or Outperform stances, arguing that Mosaic's valuation already discounts a cautious outlook and that any upside surprise in fertilizer demand or pricing could drive multiple expansion.
Improved operational execution and stronger performance in segments such as Fertilizantes are seen as proof that management can navigate regional challenges and gradually rebuild credibility with investors.
A strong U.S. harvest and the potential for fertilizers to surprise to the upside versus low expectations underpin the case that earnings risk may be skewed more favorably over a multi quarter horizon.

Bearish Takeaways

Bearish analysts point to lower phosphate prices and fragile U.S. phosphate demand, warning that margin pressure in this core business could cap earnings power and justify lower valuation multiples.
JPMorgan and others flag rising sulfur and ammonia costs as a key overhang on profitability, with higher input costs likely to offset any modest volume improvement and limit near term EBITDA growth.
Concerns around Brazil farmer credit and affordability, combined with the shoulder season for demand, increase the risk of further demand deferrals, adding uncertainty to Mosaic's volume outlook.
Several research notes emphasize inconsistent phosphate execution and reduced guidance for 2025 volumes, suggesting Mosaic may struggle to close its valuation gap with peers until earnings visibility improves.

What's in the News

The U.S. Department of Agriculture and Department of Justice have launched a joint probe into potential antitrust violations among seed and fertilizer suppliers, pressuring shares of Mosaic and other input providers as regulators pledge tougher scrutiny of agricultural competition (Bloomberg).
The Trump administration is weighing a farm bailout of at least $10 billion funded in part by tariff revenues, a move that could indirectly support fertilizer demand for producers such as Mosaic by stabilizing farmer incomes amid trade related headwinds (Wall Street Journal).
Mosaic has completed its share repurchase program announced in August 2022, retiring approximately 26.7 million shares, or just over 8% of shares outstanding, for about $1.07 billion, with no additional shares bought in the most recent quarter of the authorization (company filing).

Valuation Changes

Fair Value Estimate was reduced slightly from approximately $35.22 to $34.22 per share, reflecting a modestly more conservative outlook.
The Discount Rate increased marginally from about 8.57% to 8.59%, indicating a slightly higher assumed cost of capital.
Revenue Growth was trimmed from roughly 2.61% to 2.35% annually, signaling a modestly weaker top line growth outlook.
Net Profit Margin was lowered significantly from about 9.15% to 7.44%, capturing expectations for more sustained margin pressure.
Future P/E was raised from approximately 12.2x to 14.7x, implying a higher valuation multiple on reduced earnings power.

Operational improvements and expansion into premium products are expected to lower costs, boost margins, and drive more consistent profitability.
Favorable global supply constraints and increased agricultural demand position Mosaic for higher prices, supporting long-term revenue growth and earnings stability.
Reliance on traditional fertilizers, global oversupply, regulatory pressure, and challenges in key markets threaten Mosaic's margins, revenue stability, and long-term profitability.

Catalysts

About Mosaic

Through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients in the United States, Brazil, China, Canada, Paraguay, Argentina, Japan, Colombia, India, Australia, Peru, Mexico, Honduras, the Dominican Republic, Thailand, Indonesia, and internationally.What are the underlying business or industry changes driving this perspective?

Investments in asset reliability, automation, and cost reductions (especially in Brazil and in U.S. phosphates) are expected to enable higher production volumes and lower unit costs going forward, directly enhancing net margins and earnings as asset downtime and extraordinary maintenance costs recede.
Global fertilizer supply and demand dynamics remain favorable, with tight markets in both phosphate and potash due to limited new capacity, continued Chinese export restrictions, and record/near-record global shipments; this structural supply constraint, combined with robust farmer demand (driven by rising food needs and government support in key regions like India and Brazil), positions Mosaic to capture higher prices, lifting revenue and margins.
Mosaic's expanded distribution footprint, particularly with the new Palmeirante facility in Brazil, positions the company to capitalize on long-term agricultural growth and arable land expansion in high-growth regions, supporting both top-line revenue growth and increased earnings stability.
Entry into premium/value-added segments such as specialty fertilizers and biosciences (with Biosciences business expected to be EBITDA positive in Q4 and new product launches accelerating in 2026+) enables Mosaic to achieve higher average selling prices and expand gross margin over time.
Industry trends toward consolidation and Mosaic's ability to flexibly redirect volumes to strong-demand markets support more stable pricing discipline, driving improved revenue quality and more consistent profitability across market cycles.

Mosaic Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Mosaic's revenue will grow by 5.2% annually over the next 3 years.
Analysts assume that profit margins will shrink from 8.4% today to 6.5% in 3 years time.
Analysts expect earnings to reach $851.3 million (and earnings per share of $3.03) by about September 2028, down from $940.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.2 billion in earnings, and the most bearish expecting $326 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.0x on those 2028 earnings, up from 10.9x today. This future PE is lower than the current PE for the US Chemicals industry at 25.9x.
Analysts expect the number of shares outstanding to decline by 0.08% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.2%, as per the Simply Wall St company report.

Mosaic Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Consolidation of revenues in phosphate and potash exposes Mosaic to commodity price cycles and potential long-term secular declines in demand driven by the rise of alternative crop inputs and precision agriculture, which could amplify revenue volatility and pressure future earnings.
Persistent global overcapacity in potash and phosphate production-particularly with new supply from Russia, Belarus, and Morocco-threatens to keep downward pressure on prices and industry margins, potentially eroding Mosaic's net margins and diluting profitability.
Increasing pressure to decarbonize agriculture and heightened scrutiny from international environmental regulators may lead to costly compliance requirements, carbon taxes, or tighter controls on fertilizer use; these would raise operational costs and compress net margins across Mosaic's core business.
Brazil, a key growth market, is experiencing ongoing credit challenges, high interest rates, and a reduction in government farm input support, which could reduce farmer purchasing power, limit Mosaic's ability to expand its customer base, and increase bad debt risk, directly impacting revenues and earnings consistency.
High capital intensity and a legacy asset base mean Mosaic faces significant ongoing maintenance, environmental remediation, and asset renewal costs; these could constrain free cash flow and impact overall profitability as environmental and safety standards become more demanding.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $40.456 for Mosaic based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $49.0, and the most bearish reporting a price target of just $33.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $13.1 billion, earnings will come to $851.3 million, and it would be trading on a PE ratio of 19.0x, assuming you use a discount rate of 8.2%.
Given the current share price of $32.16, the analyst price target of $40.46 is 20.5% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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