MOS enters its next reporting cycle bruised: a Q1 miss driven by record sulfur costs has sent analysts racing to cut forecasts, leaving the stock down nearly 10% over the past month and trading at $22.39.
The catalyst is unambiguous. Record sulfur prices crushed Q1 profitability and forced production cuts at phosphate facilities in both the US and Brazil. Analysts responded swiftly — JP Morgan, UBS, and Mizuho all slashed price targets within 48 hours of the print, and multiple firms had already trimmed through April in anticipation. JP Morgan's Jeffrey Zekaukas, maintaining Underweight, cut his target from $24 to $19 — a level now below spot. UBS dropped its target to $23 while holding Neutral. The one counterpoint came from RBC Capital, which actually upgraded MOS to Outperform this morning even as it trimmed its target to $27, arguing the sell-off has gone too far. With 10 Holds and 4 Outperforms in the consensus, the Street is parked firmly in wait-and-see mode, with a mean target of $27.72 implying roughly 24% upside — though that figure reflects targets set before much of the recent downward revision cycle completed.
The positioning data tells a story of shorts retreating, not piling in. Short interest peaked near 6.7% of free float in late April and has since dropped sharply, falling nearly 7% over the week to 5.5%. Bears were actively covering into the Q1 print — a sign that at least part of the short side got what it came for. The cost to borrow is inconsequential at 0.43%, edging up roughly 13% week-on-week but still well within normal ranges. Availability in the lending pool remains ample, with borrow utilization at just 4.7% against a 52-week high of 15.4%, meaning there is no squeeze dynamic in the lending market and shorts face no friction if they choose to re-enter. The put/call ratio at 0.55 is slightly above its 20-day average of 0.53 but barely half a standard deviation away — options traders are neither alarmed nor defensive, which is a notable contrast to the headline damage the Q1 numbers caused.
The valuation picture is harder to read after EPS estimates have just been revised lower across the board. The EV/EBITDA multiple has expanded to around 6.5x on the snapshot data as earnings estimates compress, moving in the wrong direction. Forward EPS momentum sits in the 9th percentile — about as weak as it gets — and the 90-day reading is only marginally better at the 8th percentile. That's the market pricing in a meaningful earnings downgrade cycle. One softer note: the stock's 12-month forward EPS growth ranking sits in the 92nd percentile, meaning the consensus still expects a recovery in absolute terms even if near-term momentum is ugly. The bear case — Brazil market challenges, sulfur headwinds, and reliability issues at Riverview and Bartow — looks well understood now. The bull case hinges on potash volume growth toward 9.1 million tonnes by end of year and the Esterhazy expansion driving cost reductions, neither of which is visible in near-term numbers.
Institutional positioning shows no panic among the passive giants. Vanguard holds 12.3% and added modestly in Q1. FMR (Fidelity) added 1.5 million shares in the most recent period, making it one of the larger incremental buyers in the top-holder list. Blackrock and Dimensional also added. The insider activity from March was routine — awards and small benefit-plan sells at around $26.92, all before the more serious price deterioration, and all at low significance scores. No C-suite buying into the weakness has been reported.
The next scheduled event is the May 28 earnings call, which the market will treat as a chance to hear whether sulfur cost pressures have peaked and whether phosphate production cuts are beginning to stabilise output economics. That print arrives with the stock near multi-year lows, analyst targets in flux, and short sellers having already reduced exposure — the key variable is whether the cost curve inflection the bulls are calling for shows up in management's tone.
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