Stock Research Report: The Mosaic Company (MOS) – Q4 2024

Summary

The Mosaic Company (MOS) is a leading global producer of potash and phosphate fertilizers, crucial for the agricultural sector. Despite a challenging 2024 marked by weather disruptions and currency fluctuations, Mosaic delivered stable operational performance and is positioned well for 2025. The company has undertaken strategic asset sales and cost-cutting initiatives, while favorable market conditions in fertilizers suggest improved margins ahead.

Investment Potential

Short-Term (2025-2026): ⚠️ Hold

Long-Term (2027+): ✅ Moderate Buy / Watchlist

Recommendation: Hold (Short-term) / Moderate Buy (Long-term)

While near-term financial headwinds exist, improved phosphate and potash pricing, cost reductions, and capital redeployment position MOS for long-term gains. Investors should monitor execution risks.

Financial Highlights (Q4 & FY 2024)

• Revenue: $11.12B (-19% YoY)
• Net Income: $174.9M (-85% YoY)
• EBITDA: $621.5M (-76% YoY)
• EPS: $0.55 (vs. $3.52 in FY 2023)
• Free Cash Flow: $47.4M (vs. $1.00B in FY 2023)
• Total Debt: $847M (down from $3.99B in FY 2023) ✅
• Cash & Cash Equivalents: $272.8M (-22% YoY)
• Share Buybacks: 20% reduction in outstanding shares over past years ✅

Macroeconomic & Industry Headwinds

• Foreign Exchange Risks: $390M FX loss in Q4 due to BRL and CAD depreciation.
• Weather Disruptions: Hurricanes in Florida impacted phosphate production.
• Geopolitical Uncertainty: Tariffs on Canadian potash could impact pricing dynamics.

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1. Short-Term Investment Outlook (2025-2026)

🔴 Risks & Challenges

• Regulatory & Geopolitical: Potential Canadian potash tariffs (25%) could impact costs.
• Financial Risks: Declining cash flows and negative working capital buildup.
• Industry Risks: Rising fertilizer production costs and supply chain disruptions.

🟢 Growth Drivers

• Operational Recovery: Potash production at Esterhazy and Belle Plaine running at full capacity.
• Favorable Market Conditions: Tight phosphate supply due to export restrictions from China.
• Cost Reduction Initiatives: Targeting $150M+ in SG&A and efficiency savings.

⚠️ Verdict: Hold

Near-term challenges exist, but cost-cutting and market improvements provide upside potential.

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2. Long-Term Investment Outlook (2027 & Beyond)

🟢 Long-Term Growth Drivers

• Agriculture Demand: Higher crop prices boosting fertilizer application.
• Strategic Asset Sales: Monetization of underperforming assets (Ma'aden, Carlsbad) unlocking value.
• Mosaic Biosciences: Strong revenue and acreage growth in biofertilizers.

🔴 Long-Term Risks

• Commodity Price Volatility: Fertilizer demand tied to global crop cycles.
• Macroeconomic Risks: Inflation and global trade dynamics.

✅ Verdict: Moderate Buy / Watchlist

If cost initiatives and capital redeployment succeed, MOS could offer long-term value.

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3. Business Quality

✅ Moderate Risk: Strong cash flow history but facing near-term profitability issues.

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4. Financial Highlights (FY 2023-2024 Comparison)

Metric	FY 2024	FY 2023	% Change
Revenue	$11.12B	$13.69B	-19%
EBITDA	$621.5M	$2.57B	-76%
Net Income	$174.9M	$1.16B	-85%
EPS	$0.55	$3.52	-84%
Free Cash Flow	$47.4M	$1.00B	-95%
Total Debt	$847M	$3.99B	-79%
Cash & Equiv.	$272.8M	$348.8M	-22%

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5. Future Estimates (2025-2028)

Year	Revenue ($B)	EBITDA ($B)	Net Income ($M)	EPS ($)
2025	11.98	1.93	706	2.39
2026	11.85	1.92	621	2.18
2027	11.23	1.81	509	1.79
2028	17.12	2.77	1.19B	3.70

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6. Peer Comparison & Valuation

Company	P/E	P/FCF	Debt/Equity	Revenue Growth (%)
Mosaic (MOS)	41.96	N/A	0.07	-19%
Nutrien (NTR)	12.3	10.5	0.42	-12%
CF Industries (CF)	9.8	9.1	0.36	-15%
FMC Corp (FMC)	10.7	11.4	0.58	-5%

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7. Valuation & Intrinsic Value

Metric	Value
P/E Ratio	41.96 ⚠️
P/FCF	N/A ⚠️
P/B Ratio	0.64 ✅
P/S Ratio	0.66 ✅
FCF Yield	N/A ⚠️
Discount Rate (WACC)	9%
Terminal Growth Rate	3%
Estimated Intrinsic Value	$18 - $24 📉 (Current Price: $23.08)

🔹 Conclusion: Overvalued based on P/E; attractive based on P/B and P/S. MOS needs earnings recovery to justify valuation.

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8. Final Investment Assessment

📌 Short-Term (2025-2026): ⚠️ Hold (Cost reductions & divestitures yet to impact fully)
📌 Long-Term (2027+): ✅ Moderate Buy / Watchlist (If growth & profitability stabilize)

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9. Additional Considerations

✅ Macroeconomic Trends: Tariff risks, FX volatility.
✅ Company Initiatives: Biosciences, Brazil expansion.
✅ Capital Allocation: Asset sales & cost-cutting.

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Disclaimer: This analysis is for informational purposes only. Conduct independent research before investing.