POT Plagued By Declining Potash Prices

Analyst Mark Gulley of Soleil Securities Group downgrades Potash Corp (NYSE: POT) from "hold" to "sell." The target price for POT is set to $85.

According to Soleil Securities Group, the downgrade in rating is based on valuation, declining potash prices and capacity additions in the industry. As Vale is planning to build a greenfield potash mine in Argentina, the prices of potash will decline further. Capacity additions in the potash industry continue, although prices are declining drastically.

China is expected to play a role in bringing down the potash prices. Potash prices are likely to decline to $300 per ton from $400 per ton a few weeks back, the analyst adds. POT is unlikely to achieve its prior peak EPS until 2013, Soleil Securities Group adds.