Freedom Broker Downgrades Mosaic Stock Over Sulfur Costs
Freedom Broker downgraded Mosaic's stock rating to Sell after high sulfur costs drove a third-quarter net loss and pressured earnings estimates.
Financial services firm Freedom Broker downgraded the stock rating of Mosaic from Hold to Sell, citing high sulfur costs as the primary driver of earnings pressure. While the firm raised its price target to $18.00 from $17.00, it reduced its 2026 adjusted EBITDA estimate by 19% to $1,379 million.
Mosaic reported a third-quarter 2026 net loss of $0.19 per share on $3.1 billion in revenue, with net sales declining 10% year over year. The company's phosphate gross margin fell below zero as sulfur prices reached $715 per long ton. In a separate move, the Royal Bank of Canada lowered its price target for the company to $23 while maintaining a Sector Perform rating.
Mosaic management expects the fourth quarter of 2026 to be the EBITDA trough. The company anticipates relief in the first quarter of 2027 following a $615 fourth-quarter sulfur contract. To protect future margins and cash flow, Mosaic plans to reduce its SG&A costs and capital expenditures throughout 2027.
