NEW YORK (TheStreet) -- Potash Corp. of Saskatchewan (POT) stock is lower by 6.77% to $15 on heavy trading volume this afternoon, after JPMorgan downgraded shares to "neutral" from "overweight" and raised concerns about the company's ability to pay its dividend.
Falling nutrient prices will likely pressure the fertilizer supplier to cut its annual dividend to $1 from $1.52, the firm noted, Bloomberg reports.
Last week, the company announced that it will suspend operations at its Picadilly, New Brunswick mine to help combat the global supply glut weighing on potash prices.
Prices of nitrogen-based fertilizers, which Potash produces, have similarly slumped, Bloomberg adds.
"Our base case is that Potash Corp. will reduce it because the dividend was set during a period of cyclical strength and a higher level of earnings and industry structure conditions that does not resemble today's business landscape," the firm claimed, according to Bloomberg.
Potash is scheduled to report its 2015 fourth quarter financial results before the market open on Thursday.
About 16.02 million shares of Potash have been traded so far today, well above the company's average trading volume of roughly 9.01 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Potash's strengths such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins are countered by weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: POT
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.POT data by YCharts