Mosaic's (MOS) cash flow challenges will likely continue to hold its EBITDA multiple below peers, Morgan Stanley said in a note Tuesday ahead of the company's Q2 results.
Still, the report said its potash business provides a much needed ballast to its other two more volatile segments.
The company's cash flow generation will be in focus amid weak sentiment due to sulfur costs as well as phosphate affordability issues for farmers, the note said.
Morgan Stanley cut its 2027 EBITDA estimate for Mosaic to $1.93 billion from $2.24 billion, against market estimate of $2.25 billion, as it raised its Tampa sulfur benchmark estimate.
The report said 2026 EBITDA is now expected at $1.64 billion, down from its previous forecast of $1.69 billion, and compared with the consensus estimate of $1.77 billion.
Morgan Stanley cut its price target to $26 from $28 while keeping its equal-weight rating on the stock.
Price: $20.94, Change: $-1.50, Percent Change: -6.68%