Last Update 22 Dec 25

Fair value Decreased 27%

MOS: Fertilizer Demand And Phosphate Pricing Will Shape A Cautious Outlook

The analyst price target for Mosaic has been cut materially, from about $33.00 to $24.00. Analysts are factoring in weaker near term revenue growth amid softer fertilizer demand and phosphate pricing headwinds, despite some offsetting strength in margins and select business segments.

Analyst Commentary

Recent Street research reflects a more cautious tone on Mosaic, with a series of price target reductions and at least one notable downgrade. While ratings are mixed across the coverage universe, the direction of estimates and targets has generally moved lower, underscoring rising skepticism around the durability of earnings and the trajectory of fertilizer markets.

Bearish analysts are increasingly focused on softening phosphate and potash fundamentals, execution inconsistencies in key segments, and a less favorable macro backdrop for farmers. Even where ratings remain positive, trimmed price targets signal reduced conviction in near term upside and a greater emphasis on risk management for investors.

At the more negative end of the spectrum, JPMorgan shifted to a Neutral stance with a sharply lower price target, citing fragile U.S. phosphate demand, elevated input costs for sulfur and ammonia, and weaker projected EBITDA into 2026. Goldman Sachs also lowered its target while maintaining a Buy view, noting that strong Fertilizantes performance was more than offset by reduced phosphate sales volume guidance, which weighs on the growth narrative and valuation support.

Several neutral rated firms have also cut targets, arguing that Mosaic needs more consistent execution, particularly in phosphate, to close its valuation gap with peers. Others expect shares to remain rangebound as the industry enters a shoulder season characterized by demand deferrals, softer pricing and greater earnings uncertainty into 2025.

Bearish Takeaways

Bearish analysts are cutting price targets, arguing that lower phosphate prices, fragile demand and rising input costs erode visibility on earnings and cap near term valuation upside.
Concerns around inconsistent execution in phosphate and credit related challenges in Brazil are leading to estimate reductions and a view that Mosaic will struggle to narrow its valuation discount versus peers.
Several research notes highlight demand deferrals and a weaker seasonal backdrop for fertilizers, raising the risk that volumes and pricing undershoot expectations and pressure growth assumptions.
Lowered 2025 sales volume guidance and a more cautious outlook for EBITDA into 2026 reinforce the view that Mosaic’s growth profile is moderating, limiting multiple expansion potential even from current levels.

What's in the News

President Trump is considering at least $10B in aid to U.S. farmers using tariff revenue. This move could support farm incomes and indirectly stabilize fertilizer demand for suppliers including Mosaic. (Wall Street Journal)
The U.S. Department of Agriculture and Department of Justice have launched a joint antitrust review of seed and fertilizer suppliers. Mosaic shares are trading lower on concerns about potential regulatory action and pricing scrutiny. (Bloomberg)
Mosaic reported that from July 1, 2025 to September 30, 2025 it repurchased zero shares, but confirmed completion of its previously authorized buyback, totaling 26.68 million shares or 8.05 percent of shares outstanding for about $1.07 billion. (Company disclosure)

Valuation Changes

The fair value estimate has fallen significantly, from about $33.00 to $24.00, implying a materially lower intrinsic value assessment for Mosaic shares.
The discount rate has risen slightly, from roughly 8.20 percent to about 8.58 percent, signaling a modest increase in perceived risk or required return.
The revenue growth outlook has deteriorated sharply, shifting from an expected increase of roughly 0.43 percent to a projected decline of about 1.23 percent, reflecting weaker top line assumptions.
Net profit margin expectations have improved meaningfully, moving from about 2.68 percent to approximately 4.74 percent, indicating a more favorable margin profile despite softer revenue.
The future P/E multiple has compressed substantially, dropping from around 43.2x to about 18.0x, pointing to reduced valuation optimism for Mosaic’s forward earnings.

Heightened regulatory and environmental compliance pressures are expected to elevate costs and erode profitability for Mosaic's core fertilizer business.
Innovations in agriculture and a shift towards bio-based alternatives threaten sustained demand and pricing power for Mosaic's traditional product lines.
Operational efficiencies, strong global demand, strategic expansion, and innovative new segments position Mosaic for sustained growth in revenue, profitability, and cash flow.

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?

Increasing global requirements for sustainable agricultural practices are expected to trigger more rigorous environmental regulations in major markets, which will likely elevate operational costs for Mosaic through higher compliance expenses, additional capex for process changes, and possible regulatory penalties, severely impacting long-term net margins and constraining profitability.
Rapid advancements in precision agriculture and alternative nutrient technologies threaten to undermine long-term demand for Mosaic's traditional phosphate and potash products, putting sustained downward pressure on core revenue as farmers adopt less resource-intensive, lower-volume fertilization methods.
Elevated environmental remediation costs from Mosaic's legacy mining operations, as evidenced by ongoing provisions for future site remediation such as the Taquari potash mine, are likely to further erode net margins over time, with risks of increasing liabilities as regulations tighten and environmental incidents rise in frequency.
Accelerating industry adoption of biofertilizers and organic farming systems points to a structural reduction in demand for conventional chemical fertilizers, discouraging volume growth and compressing revenue prospects for Mosaic's primary business lines.
Ongoing consolidation among large-scale agricultural producers and input providers is expected to diminish Mosaic's pricing power in key international markets, contributing to shrinking gross margins and limiting the company's ability to sustain earnings growth over the long term.

Mosaic Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more pessimistic perspective on Mosaic compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
The bearish analysts are assuming Mosaic's revenue will decrease by 0.4% annually over the next 3 years.
The bearish analysts assume that profit margins will shrink from 8.4% today to 2.7% in 3 years time.
The bearish analysts expect earnings to reach $305.9 million (and earnings per share of $0.97) by about September 2028, down from $940.0 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 43.2x on those 2028 earnings, up from 11.3x today. This future PE is greater 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?

Mosaic's extensive cost reduction and operational improvement initiatives, such as automation, supply chain optimization, and successful asset reliability programs, position the company to lower their cost base, enhancing net margins and supporting ongoing earnings growth.
Mosaic is set to benefit from tight supply and strong demand fundamentals for both phosphate and potash globally, which supports the outlook for elevated prices and robust stripping margins, directly bolstering revenue and profitability.
The company's strategic expansion in Brazil, particularly with new distribution capacity and a focus on mega-farmers with strong credit profiles, is expected to unlock significant growth in Mosaic Fertilizantes, driving higher revenues and EBITDA over the long term.
Growing contributions from Mosaic Biosciences, with revenues more than doubling year-over-year and expected to become EBITDA positive, introduce a high-margin, innovative segment that can add meaningful upside to Mosaic's overall earnings trajectory.
Global secular tailwinds-such as limited incremental new fertilizer capacity, persistent agricultural demand fueled by population growth and biofuel policies, and Mosaic's ability to flexibly allocate volumes to the strongest markets-are likely to sustain favorable pricing and volume conditions, supporting strong future revenue and cash flow.

Valuation

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

The assumed bearish price target for Mosaic is $33.0, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Mosaic's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
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 bearish analysts, you'd need to believe that by 2028, revenues will be $11.4 billion, earnings will come to $305.9 million, and it would be trading on a PE ratio of 43.2x, assuming you use a discount rate of 8.2%.
Given the current share price of $33.41, the bearish analyst price target of $33.0 is 1.2% lower. The relatively low difference between the current share price and the analyst bearish price target indicates that the bearish analysts believe on average, the company is fairly priced.
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

AnalystLowTarget 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 AnalystLowTarget 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 AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Stricter Environmental Rules And Legacy Costs Will Crush Margins