Nutrien (NTR -3.2%), Mosaic (MOS -3.7%) and CF Industries (CF -2.5%) all sink into the red after Citigroup’s P.J. Juvekar downgrades the three fertilizer firms to Neutral from Buy, with respective price targets $47, $21 and $43, citing high inventories and flatter cost curves.

The impact of coronavirus seems negative for demand in China, Juvekar says; while Hubei province has ~25% of Chinese phosphate capacity, the Chinese government issued a directive designating the fertilizer industry as a “critical” sector and said phosphate production would resume, but prices for crop nutrient diammonium phosphate have hardly moved since the virus outbreak.

The analyst says he prefers FMC Corp. (FMC -0.5%) and Corteva (CTVA +0.5%) in the ag sector.


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