Weakness Offers Buying Opportunity In MOS

Analysts at Goldman Sachs upgrade Mosaic Co (NYSE: MOS) from "neutral" to "buy." The target price for MOS has been raised from $64 to $68.

According to Goldman Sachs, the upgrade in the rating is to reflect the significant decline in Mosaic’s share price last week. Although investors are concerned about the anticipated decline in potash prices in the near term, the current valuation reflects the worst-case scenario, the analysts say.

Potash represents the greatest leverage to a normalizing fertilizer demand picture in 2010-11, the analysts say. Conversations with farmers, dealers and industry players suggest that the demand for potash would become strong during 2010, following the extremely weak demand during 2009, the analysts mention. Investors are confused about the negotiations with China regarding potash prices and freight charges worldwide, the analysts add.