Nutrien Ltd
Materials
North America
Investment summary

Nutrien, one of the largest global fertiliser producers, was formed as a result of the merger between PotashCorp Saskatchewan and Agrium. The company sells over 27mt of potash, phosphates, and nitrogen fertilisers. The retail network includes over 2,000 shops in seven countries. The company gets access to farmers via over 3,400 crop advisors and agronomists. Nutrien's potash capacity of over 20mt is located at six lower-cost potash mines in Saskatchewan. Nutrien is the third-largest nitrogen producer in the world with over 7mt of gross ammonia capacity. The company can produce 11mt of total nitrogen products in the US, Canada, and Trinidad. In the phosphate segment, the company operates two large integrated phosphate mining and processing facilities and four plants in the US.

Details
Ticker
NTR.N
Trading currency
USD
Last close price, (currency)
74.07
Common shares outstanding
507,246,110
Preferred shares
MktCap, (currency) mn
36,989
Target price
95.40
Current opinion
Buy
Description

Nutrien Ltd. is a Canada-based company, which is a provider of crop inputs and services. The Company operates through four segments: Nutrien Ag Solutions (Retail), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seeds and merchandise, and it provides services directly to growers through a network of farm centers in North America, South America and Australia. Its Retail business includes Nutrien Ag Solutions and Landmark Retail businesses. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that it produces. The Company produces and distributes approximately 27 million tons o... Nutrien Ltd. is a Canada-based company, which is a provider of crop inputs and services. The Company operates through four segments: Nutrien Ag Solutions (Retail), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seeds and merchandise, and it provides services directly to growers through a network of farm centers in North America, South America and Australia. Its Retail business includes Nutrien Ag Solutions and Landmark Retail businesses. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that it produces. The Company produces and distributes approximately 27 million tons of potash, nitrogen and phosphate products for agricultural, industrial and feed customers worldwide. The Company has offices in Canada and the United States. It operates approximately 2,000 retail locations in over seven countries.

Industry view (TAM)

The global fertiliser market experienced an essential price increase across the product range in 1-2Q 2022 with some correction in 2H22. Global potash prices remain at high levels due to supply constraints from Russia and Belarus and high demand levels. The potash demand is estimated at 60mt in 2022 and may exceed 70mt in 2023. The nitrogen market met growing gas costs in 2022 due to the limited supply of gas in Europe from Russia. The slow start of the North American planting season has softened nitrogen prices, but they remain at a high historical level. The phosphate market has high historical pricing due to historically low inventory, strong import demand, and tight raw material supply from Russia. China reduced phosphate exports in 2022 and may further restrict deliveries to global markets in 2023. Historically high crop price index and good crop grower cash margins are supportive of fertiliser demand despite high prices.

Pros
  1. Strong market position due to large own capacities and own retail chain  
  2. Access to final customers in key markets via own retail chain helps to stabilize margin through cycle  
  3. Self-sufficiency in phosphate feedstock and high nitrogen capacity
  4. Dominance in export potash markets due to high scale of export volumes
  5. Large own nitrogen capacities  
  6. Growing fertiliser demand in the medium and long-term, driven by population growth
Cons
  1. Exposure to gas and energy cost growth and volatility
  2. Risk of market share reduction in Asia due to geopolitical changes
  3. The potential downside for fertiliser prices once the war conflict in Eastern Europe abates
  4. Cost inflation
  5. The risk of Chinese exports increase in phosphate and nitrogen segments
Risks
  1. Energy price volatility
  2. Weakening demand of farmers due to delayed season, decreasing margin, and other factors
  3. Cost inflation
  4. Geopolitical risks
  5. Risks of potential oversupply from low-cost regions
Historical price chart
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Peer Group (top 5)

Company RIC Market Capitalization, $mn Last reporting year P/E Fwd 1Y P/E Fwd 2Y EV/EBITDA 1Y fwd EV/EBITDA 2Y fwd EV/Revenues 1y fwd EV/Revenues 2y fwd
Nutrien Ltd NTR.N 40,543 2022-12-31 8.5 9.9 5.7 6.4 1.6 1.7
Mosaic Co MOS.N 18,285 2022-12-31 7.6 9.0 5.2 6.0 1.4 1.6
CF Industries Holdings Inc CF.N 16,497 2022-12-31 7.7 10.3 5.3 6.7 2.5 2.8
ICL Group Ltd ICL.TA 9,538 2022-12-31 7.8 9.8 5.1 6.1 1.4 1.5
Yara International ASA YAR.OL 11,804 2022-12-31 7.0 8.8 4.5 5.0 0.7 0.8
K&S AG SDFGn.DE 4,377 2021-12-31 3.0 5.3 1.6 2.5 0.7 0.8
Financials
2017 2018 2019 2020 2021 2022 2023 2024 2025
Revenue 18,169 19,636 20,084 20,908 27,712 37,884 35,628 33,736 33,478
Growth 8% 2% 4% 33% 37% -6% -5% -1%
EBITDA 2,412 2,006 3,661 2,891 6,732 14,360 7,302 6,764 5,967
EBITDA margin 13.3% 10.2% 18.2% 13.8% 24.3% 37.9% 20.5% 20.1% 17.8%
Net income 656 -31 992 459 3,179 7,687 3,538 3,126 2,519
Net margin 3.6% -0.2% 4.9% 2.2% 11.5% 20.3% 9.9% 9.3% 7.5%
Net debt 9,134 6,889 9,360 8,766 9,127 9,823 9,823 9,823 9,823
MktCap 29,841 29,155 27,593 42,808 46,292 46,292 46,292 46,292

Historical Multiples

2018 2019 2020 2021 2022 2023 2024 2025
EV/Revenue 1.9 1.9 1.7 1.9 1.5 1.6 1.7 1.7
EV/EBITDA 18.3 10.5 12.6 7.7 3.9 7.7 8.3 9.4
P/E -962.6 29.4 60.1 13.5 6.0 13.1 14.8 18.4
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