RBC Capital analysts provided a review on Nutrien Ltd. (NYSE: NTR) following the company’s investor update day, which helped highlight a realistic and achievable long-term outlook for the company and the ag/fertilizer sector.
The company highlighted a potential mid-cycle scenario at approximately 9 billion EBITDA, based on the planned new capacity additions in potash and nitrogen, and the company’s view on structurally higher mid-cycle prices. This compares to approximately 5 billion EBITDA average from 2010 to 2021. The analysts believe this view is realistic given structural market changes that support higher normalized prices and the planned capacity additions.
The company also announced plans to raise potash production capability to 18Mt by 2025, up from 15Mt in 2022, at a cost of $150-200/ton.