BELARUS NEWS AND ANALYSIS
DATE:
24/03/2008
Ahead of the Bell: Potash Corp. Upgraded
The Associated Press
NEW YORK - An RBC Capital Markets analyst upgraded shares of Potash Corp. of Saskatchewan Inc. on Monday, expecting the fertilizer company to gain from higher prices for potash.
Both Belarusian Potash Co., a Belarus-based potash supplier, and Indian Potash Ltd. recently agreed to a contract potash price of $625 per metric ton _ up sharply from a previous price of $270 per ton. Pricing for the fertilizer has been supported by factors that include rising demand for ethanol, made from corn.
Analyst Fai Lee upgraded the stock to "Top Pick" from "Outperform," with a price target raised to $250 from $195. That implies upside of around 73.3 percent from Thursday's $144.26 closing price.
Lee believes the recent Indian contract will set the tone for negotiations with other countries, like China.
"We believe it is only a matter of time before Chinese potash prices approach global levels," Lee wrote in a client note.
CIBC World Markets analyst Jacob Bout suspects the recent contract will cause a contract with China to settle sooner than expected and at a higher-than-expected price.
"The Indian contract settling before the Chinese negotiations, unprecedented historically, is an indication of the current tight supply and demand fundamentals for potash," Bout wrote in a client note.
Bout's new price target is $200, up from $155. He also raised his rating to "Sector Outperform" from "Sector Perform."
In premarket trading, shares advanced $4.14, or 2.9 percent, to $148.40.
Source:
http://www.chron.com/disp/story.mpl/ap/fn/5642969.html
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