NEW YORK (TheStreet) -- Shares of Potash Corp. of Saskatchewan (POT) are gaining, up 1.81% to $36.04 in pre-market trading Wednesday, as the company had its rating raised to "outperform" from "market perform" by analysts at Raymond James this morning, after Russian company Uralkali suspended work at a potash mine in Russia's Perm region and evacuated workers yesterday.
Analysts at the firm increased its price target to $40 from $38.50, citing the competing company's supply outage.
Raymond James analysts said they believe the potash mine evacuation and work suspension at Uralkali will result in a tighter market and benefit western producers.
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Canada-based Potash is an integrated fertilizer and related industrial and feed products company, operating in potash, phosphate and nitrogen segments.
Separately, TheStreet Ratings team rates POTASH CORP SASK INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate POTASH CORP SASK INC (POT) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 42.54% is the gross profit margin for POTASH CORP SASK INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.31% significantly outperformed against the industry average.
- The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Chemicals industry average. The net income has decreased by 10.9% when compared to the same quarter one year ago, dropping from $356.00 million to $317.00 million.
- Net operating cash flow has declined marginally to $574.00 million or 6.81% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: POT Ratings Report