Is There Now An Opportunity In Nutrien Ltd. (TSE:NTR)?

Today we're going to take a look at the well-established Nutrien Ltd. (TSE:NTR). The company's stock received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$112 at one point, and dropping to the lows of CA$71.52. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Nutrien's current trading price of CA$78.45 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Nutrien’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Nutrien

What Is Nutrien Worth?

According to my valuation model, Nutrien seems to be fairly priced at around 8.7% below my intrinsic value, which means if you buy Nutrien today, you’d be paying a fair price for it. And if you believe the company’s true value is CA$85.97, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Nutrien’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Nutrien generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Nutrien, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, NTR appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on NTR for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on NTR should the price fluctuate below its true value.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Be aware that Nutrien is showing 3 warning signs in our investment analysis and 1 of those is a bit concerning...

If you are no longer interested in Nutrien, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.