Mosaic's Third-Quarter Core Profit Likely to Miss Views Amid Cost Headwinds, RBC Says

11:37 AM EDT, 10/05/2026 (MT Newswires) -- Mosaic's (MOS) third-quarter core profit is likely to fall short of Wall Street's expectations due to rising operational costs from phosphate production cuts and lower potash output, RBC Capital Markets said in a Monday report. For the ongoing quarter, RBC is projecting earnings before interest, taxes, depreciation, and amortization of $316.9 million for the fertilizer company, compared with the consensus of $363 million. For full-year 2026, the brokerage is looking at EBITDA of $1.51 billion, below the consensus of $1.58 billion. RBC is looking at third-quarter EPS of $0.06, compared with the FactSet-polled consensus of $0.05. In August, Mosaic Chief Executive Bruce Bodine said that the company had taken some measures amid sulfur availability and affordability challenges, including curbing phosphate production, cutting costs, and reducing capital expenditures. The company has lowered its 2026 capex budget to $1.20 from $1.25 billion previously. "Phosphate production remains curtailed due to margin pressures from high sulphur costs and elevated idled/fixed cost absorption due to temporary curtailments at Louisiana and Bartow," RBC analyst Andrew Wong wrote. RBC's third-quarter EBITDA estimate for Mosaic assumes phosphate sales of 1.3 million tons, compared with 1.4 million tons sold in the prior quarter, and the consensus of 1.2 million tons. The company had guided for third-quarter phosphate sales to be between 1.1 millions and 1.4 million tons. The brokerage is looking at third-quarter potash sales of 2.1 million tons, in line with the consensus, and compared with the 2 million tons sold in the second quarter. Mosaic has projected potash sales of 2.0 million tons to 2.2 million tons for the ongoing quarter. "In potash, market conditions and prices remained steady, but we forecast potash volumes at the lower-end of guidance due to market reports of Mosaic purchasing potash barges, which could indicate softer production in the quarter," Wong said. Taking into account phosphate challenges and delayed capex spend, RBC expects "minimal" free cash flow in 2026 and 2027. RBC downgraded its rating on Mosaic to sector perform from outperform, and trimmed its price target on the stock to $25 from $27. The stock was 0.2% lower in Monday morning trade, having fallen about 13% so far this year. Looking at the overall fertilizer industry situation, the RBC report said that prices were stronger through the third quarter "despite soft seasonality, with nitrogen bouncing quickly off mid-year lows, phosphate staying tight, and potash steady." "Nitrogen supply continues to be disrupted by the US/Iran war, with prices rising through (the third quarter," Wong said. "Prices remain below elevated marginal cost for now, but with potential upside if US/Iran war persists." Among Mosaic's peers, RBC said it likes outperform-rated Nutrien (NTR) given "continued strong execution and supportive (agriculture/fertilizer) environment." The brokerage said CF Industries (CF) and LSB Industries (LXU) should benefit from higher nitrogen prices, though CF is seen as "more fully valued and captive to Iran war headlines while LSB is undervalued." Price: 20.95, Change: -0.13, Percent Change: -0.59