Mosaic Faces Short-Term Setback on Production Miss, But Long-Term Outlook Stays Firm

Barclays reaffirmed its Overweight rating and $40 price target on Mosaic (NYSE:MOS), even as the fertilizer giant grapples with a production downgrade that could weigh on near-term sentiment.

The revision follows an unexpected announcement regarding lowered phosphate volume guidance for fiscal 2025. Operational challenges at the company’s Riverview facility—specifically extended planned downtimes aimed at addressing bottlenecks—are at the heart of the reduction. Since these volumes can’t be recovered, the cut carries full-year implications. Additional repairs at Louisiana sites further contributed to quarterly volume losses.

Despite these hurdles, Barclays remains confident in Mosaic's long-term investment thesis. Positives include improved performance in Brazil, which surprised to the upside in Q1 and is expected to do “significantly better” going forward. The company is capitalizing on favorable foreign exchange trends, rising margins in its distribution network, and enhanced efficiency and pricing strength.

While the production setback is likely to trigger a short-term dip in the stock, Barclays believes Mosaic's underlying fundamentals and international tailwinds justify maintaining a bullish stance.