Nutrien Is Up By 3%, Here Is Why

Key Insights

• Nutrien’s first-quarter earnings missed analyst estimates, but the stock moved higher. 
• Traders focused on the company’s guidance for 2022, which reflects favorable market conditions. 
• While the company’s shares enjoyed a strong start of this year, the stock is trading at just 9 forward P/E. 

Nutrien Gains Ground After Raising Full-Year 2022 Guidance

Shares of the fertilizer producer Nutrien gained upside momentum after the company released its first-quarter results. Nutrien reported revenue of $7.66 billion and adjusted earnings of $2.70 per share, beating analyst estimates on revenue and missing them on earnings.

The market focused on Nutrien’s new outlook for the full-year 2022. Adjusted EBITDA guidance was raised to $14.5 billion – $16.5 billion, while adjusted EPS guidance was increased to $16.20 – $18.70. The company noted that it would allocate a minimum of $2 billion to share repurchases in 2022.

Speaking about the outlook for the year, Nutrien commented: “We expect to generate higher earnings and cash flows in 2022, which provides an opportunity to accelerate our strategic initiatives that we believe will advance sustainable practices and create long-term value for all our stakeholders.”

Other fertilizer stocks like Mosaic and CF Industries have also enjoyed support today as traders bet that market conditions will remain favorable in 2022.

What’s Next For Nutrien Stock?

Currently, analysts expect that Nutrien will report earnings of $14.79 per share in 2022 and $11.43 per share in 2023, so the stock is trading at 9 forward P/E.

Analyst estimates have been moving higher in recent months, which was bullish for the stock. This trend will be continued as the company expects to report earnings of $16.20 – $18.70 per share this year, which is higher than the current analyst consensus.

The situation in the agricultural markets remains challenging. While some products, like wheat, have pulled back from their recent highs, corn and rice futures are trading at yearly highs. In this market environment, fertilizer pricing will likely remain robust, providing more support to Nutrien stock.

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