Wells Fargo has lowered its price target for Mosaic (NYSE:MOS) from $28.00 to $27.00, while sustaining an Equal Weight recommendation on the fertilizer producer's shares. Currently, Mosaic’s stock is trading slightly above this target at $28.16. An InvestingPro evaluation signals the stock might be undervalued when assessed against its Fair Value metric.
The revision in the price target is primarily driven by Wells Fargo’s downgraded expectations for Mosaic’s fourth-quarter performance. The firm highlighted a weakening Brazilian fertilizer market and curtailments in SSP (single superphosphate) production as key factors behind this adjustment. Consequently, the bank revised its Q4 EBITDA forecast for Mosaic to $550 million, down from an earlier estimate of $680 million and below the consensus forecast of $586 million.
In parallel, Wells Fargo reduced its earnings per share (EPS) estimate for the same quarter to $0.39 from $0.68. For the full year 2025, the forecasted EBITDA now stands at $2.47 billion, down from the previous $2.73 billion, and below consensus estimates of $2.59 billion. The EPS projection for 2025 was similarly scaled back to $2.43.
Despite near-term softness, Wells Fargo maintained its 2026 EPS forecast at $2.14, expecting EBITDA of $2.35 billion. This implies a 12% decline in earnings compared to 2025. The bank’s outlook for 2026 incorporates anticipated phosphates supply tightness and a recovery in Brazilian demand, which it expects will eventually strengthen market conditions.
The $27 price target is based on applying a 5.5 times enterprise value to EBITDA multiple on the company's 2026 projections, according to Wells Fargo’s detailed valuation analysis.
In other company developments, Mosaic's preliminary fourth-quarter 2025 sales volumes were disappointing, with phosphate shipments approximately 1.3 million tonnes and potash sales around 2.2 million tonnes. These figures reflect reduced fertilizer demand in North America, which the company reported as falling more severely than standard seasonal patterns. Notably, phosphate shipments declined roughly 20% year-over-year.
This demand softness has influenced market sentiment, leading Oppenheimer to downgrade Mosaic’s stock rating from Outperform to Perform due to a perceived absence of clear catalysts for demand improvement within the fertilizer sector.
Meanwhile, Mosaic has committed to divesting its potash operations located in Carlsbad, New Mexico. The company reached a definitive agreement to sell these assets to International Minerals Carlsbad, LLC for $30 million. The terms include an immediate cash payment of $20 million, with the balance of $10 million to be paid in three annual installments commencing in 2029. Additionally, the purchaser will assume responsibility for asset retirement obligations tied to the Carlsbad facility.
These strategic moves underscore Mosaic’s attempts to adapt to a challenging market environment by optimizing its portfolio amid fluctuating fertilizer demand and geographic market variability.