Potash Corp (POT) Hits New 52-Week High: What's Driving It?

Shares of Potash Corporation of Saskatchewan Inc. (NYSE:POT) scaled a fresh 52-week high of $21.04 on Dec 29, before eventually closing the day at $20.65.

The company has a market cap of roughly $17.6 billion. Average volume of shares traded in the last three months is around 3,758.1K. It has an expected long-term EPS growth of 6.5%.

Driving Factors

Potash Corp expects strong customer engagement in all key potash markets and robust demand to continue into 2018. For 2017, the company anticipates global shipment at 62-65 million tons, with total shipments in North America to approach the higher end of 9.3-9.8 million tons range.

The company expects nutrient affordability to continue driving strong consumption in China. The demand environment in India is improving, supported by favorable monsoon, higher minimum support price and considerable agronomic need.

Potash Corp and Agrium Inc. (NYSE:AGU) have agreed to combine their businesses to create a fertilizer giant with a pro forma enterprise value of $36 billion. The integrated company, Nutrien, is expected to generate as much as $500 million of annual operating synergies.

The companies have obtained regulatory approval in China, Canada, Russia, India and Brazil for the deal. Recently, Potash Corp and Agrium have also received the regulatory approval required to close their merger of equals transaction from the United States' Federal Trade Commission (FTC). The transaction is subject to customary closing conditions and is expected to close effective Jan 1, 2018. The FTC approval provides a final clearance for the merger involving two industry leaders.

Shares of Potash Corp have gained 7.7% in the past three months, underperforming the industry’s 9% growth.

Zacks Rank & Stocks to Consider

Potash Corp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Huntsman Corporation (NYSE:HUN) and Kronos Worldwide Inc. (NYSE:KRO) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth rate of 8%. Its shares have soared 72.8% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have surged 113.2% year to date.

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