"UBS sees the risk/reward as more balanced at current share levels after a cascade of margin headwinds hit the phosphate business. The core problem: elevated sulfur and ammonia input costs, exacerbated by Middle East supply disruptions, are compressing stripping margins."
"Phosphate cash cost of conversion climbed to $131 per tonne in Q3 2025, up from $101 in the prior year. The Q4 earnings call added urgency: sulfur prices spiked to roughly $500 per metric ton late in the quarter."
"CEO Bruce Bodine acknowledged the severity directly: 'When sulfur prices spiked at the end of the year, which we expect will significantly compress margins in our Phosphate and Mosaic Fertilizantes segments well into the first half of 2026.'"
Mosaic Company received a downgrade from UBS, reducing its rating to Neutral and price target to $27 due to structural profitability issues in phosphate. Rising sulfur and ammonia costs, worsened by Middle East supply disruptions, are compressing margins. Phosphate cash conversion costs increased significantly, and management anticipates a $250 million EBITDA headwind in Q1 2026. Other firms, including Bank of America, also downgraded Mosaic, citing delayed margin expansion. The stock has fallen 8.1% recently, closing at $26.19, near UBS's target.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]