MOSAIC CO (MOS): what the price requires
At today's price, MOSAIC CO (MOS) is priced for +0.4% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/MOS
Headline
| Field | Value |
|---|---|
| Ticker | MOS |
| Company | MOSAIC CO |
| Current price | $22.07/sh |
| Composition | Phosphate Crop Nutrients 27% / Potash Crop Nutrients 24% / Crop Nutrient Blends 11% / Performance Products 22% / Phosphate Rock 1% / Other 14% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 2.6% |
| Operating margin today | 4.6% |
| Margin compression implied | -2.0pp |
| Implied growth | 0.4% |
| Multiple paid | 15x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.4pp.
Reconcile: at the x-ray's 9.3% required return this reads ~7.6%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.10σ |
| cohort percentile (of 76 peers) | 34 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power/growth-DCF land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 8.23x | 2 | expensive |
| Earnings | 7.51x | 2 | expensive |
| Relative | 1.24x | 3 | expensive |
| Growth | 1.52x | 4 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.2%); the inversion above states its own rate.
Per-Model Detail (n=11)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $98.79 | 0.22x | yes | Reference only (OCF-based, capex excluded): OCF $0.9B |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $11.35 | 1.94x | yes | P/E 30.8x (blended: static sector reference 14x + trailing (TTM) 156x), scenarios: 25.4x / 30.8x / 36.2x (bear / base = reference held flat / bull), EV/EBITDA 8x |
| Simple DDM | Growth | $10.10 | 2.19x | yes | DPS $0.89, g=0.4% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $11.22 | 1.97x | yes | Stage 1: -5% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $1.53 | 14.42x | yes | BV/sh $37.18, ROE (TTM) 0.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $0.78 | 28.29x | yes | 5yr excess ROE then converge to ke=9.3% (excluded from median) |
| Discounted Future Market Cap | Growth | $20.55 | 1.07x | yes | Rev $12.4B, growth 12% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 12x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $53.72 | 0.41x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.93B × (1−21%) / WACC 7.2% → EPV (no growth) |
| Residual Income | Asset | $0.55 | 40.13x | yes | BV $37.18 + 5yr PV of (ROE (TTM) 0.4% − Kₑ 9.3%) × BV; BV grows 0.2%/yr (excluded from median) |
| Graham Number | Asset | $10.82 | 2.04x | yes | √(22.5 × EPS $0.14 × BVPS $37.18) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $17.76 | 1.24x | yes | EBITDA $1.23B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $0.12 | 183.92x | yes | EPS $0.14 × (8.5 + 2×-4.5%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $58.72 | 0.38x | yes | Revenue $12.43B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $1.51 | 14.62x | yes | EPS $0.14 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $4.0b |
| Net debt / NOPAT (after-tax) | 9.30x |
| Net debt / operating income (pre-tax) | 7.35x |
| Share count CAGR (buyback) | -3.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At $22.91 Mosaic is being valued near a cyclical trough. Trailing EPS is just $0.14 and trailing return on equity is about 0.4%, so any method that capitalizes current earnings looks alarming, while the methods that normalize across the cycle land far higher.
The disagreement is the story. The right number depends entirely on whether you price the trough or the mid-cycle.
The near-term squeeze is real. Q1 2026 swung to a $258 million loss as sulfur and ammonia costs surged, Mosaic curtailed phosphate output and withdrew production guidance, and net debt of about $4.0 billion sits on top of a depressed earnings base.
Bull Case
Valuing a fertilizer producer requires reading through the cycle, and that is where the bull case lives. Mosaic sells phosphate and potash, two commodities whose prices swing hard with crop economics, input costs, and global supply, so a single trough year tells you almost nothing about earning power. The filing makes the commodity nature explicit, noting potash "is a commodity available from several geographical regions around the world and, consequently, the market is highly competitive" (FY2025 10-K, accession 0001285785-26-000017). The discipline for a cyclical is to normalize, and on a five-year average of operating income the Earnings Power Value method lands at about $53, more than double the current $22.91 price (June 27, 2026). The business has earned far more than its trailing $0.14 of EPS implies, and at this price the market is paying roughly 15x mid-cycle operating income, which the reverse solve reads as within range rather than stretched.
The potash side is already running hot even as phosphate struggles. Industry reporting has Canpotex, the potash export marketing entity, fully committed through June and on pace for a record year, so the part of the portfolio with the cleaner cost structure is performing while the phosphate side absorbs the input-cost shock. That divergence matters: a normalized valuation does not need both segments firing at once, only the average to hold, and potash strength is offsetting phosphate weakness in real time.
Management is defending value through the downcycle rather than chasing volume into it. Mosaic cut 2026 capital spending by $250 million to $1.25 billion, initiated a workforce reduction targeting $50 million of annualized savings, curtailed marginal phosphate capacity at Bartow and Louisiana, and completed the sale of its Carlsbad potash mine. It has also reduced share count about 3.8% annually. The filing frames its capital priorities around "financial strength, sustaining our assets" and investing to grow "either through organic growth or taking advantage of strategic oppo"rtunities (accession 0001285785-26-000017). For a buyer who believes input costs normalize and crop-nutrient demand is durable, the bull case is a cyclical bought near the bottom of its earnings range with management acting to protect the through-cycle franchise.
Bear Case
The valuation methods are openly at war here, and the conservative ones deserve the benefit of the doubt. On one side, the earnings-power frame on a five-year average ($53) and the reverse-DCF normalized band (roughly $26 to $58) say the stock is cheap against mid-cycle economics. On the other, every method anchored to what Mosaic is actually earning right now says it is expensive: Simple Excess Return at $1.53 on a 0.4% trailing ROE, Earnings Yield at $1.51 on $0.14 of EPS, Relative Valuation at $11 on a trailing P/E near 162x. The X-ray summary is blunt that on current numbers "no valuation family reaches the price." The honest reading is that the bull case requires the cycle to turn on schedule, and the bear case only requires it to stay down longer than the price assumes.
The near-term evidence favors the bears. Q1 2026 was a $258 million loss with adjusted EPS of $0.05 against a $0.24 consensus, as a rapid surge in sulfur and ammonia prices, tied to the Persian Gulf conflict, compressed stripping margins below variable cost on a marginal basis. Mosaic responded by curtailing roughly half the capacity at its Bartow and Louisiana phosphate plants, idling SSP production in Brazil, and withdrawing its phosphate production guidance entirely. The filing already showed the direction of travel before the shock, with Phosphate-segment gross margin falling to "$437.3 million in the current year compared with $594.0 million for the prior year" (accession 0001285785-26-000017). Withdrawn guidance and a margin below variable cost are not the markers of a cycle about to inflect.
The balance sheet removes the cushion that would make the cyclical bet comfortable. Net debt is about $4.0 billion against only $282 million of liquid assets and a trailing operating income near $110 million, and interest expense is not separately reported so coverage cannot even be computed from the public numbers. Mosaic also operates in a market where, in its own words, shifts in competitors' "marketing focus have in the past significantly affected both the prices at which we sell our products and the volumes that we sell, and are likely to continue to do so" (accession 0001285785-26-000017). A levered commodity producer at a margin trough, facing competitor supply discipline it does not control, is exactly the setup where the conservative valuation methods turn out to be the honest ones.
Valuation
The defining feature of Mosaic's valuation is the gap between the methods, and that gap is a measurement-basis problem more than a modeling error. Capitalize what the company is earning right now, $0.14 of EPS, a 0.4% return on equity, and the asset and earnings-yield methods collapse toward $1.50, while trailing-P/E relative valuation sits near $11. Normalize across the cycle, and the picture inverts: Earnings Power Value on five-year average operating income reaches about $53, and the reverse-DCF reasonable-growth band lands at roughly $26 to $58 with a base near $31.
The inversion reconciles the two by pricing the record-basis operating income rather than the trailing trough. On that basis the market is paying about 15x company-wide operating income, which implies only about 1.2% annual operating-profit growth over five years with the implied margin near 2.5%, computed at an 8.1% cost of capital. That is a modest hurdle, and the reverse solve calls it within range and in the lower half of the sector multiple. There is a real basis divergence here worth stating plainly: the trailing EDGAR operating income and the record-basis figure differ by more than ten percent, so the two views are measuring different things, neither silently swapped for the other.
The practical takeaway is that Mosaic is a cyclical whose fair value is a function of where you stand in the cycle. At $22.91 the price sits above the trough-based methods and inside the normalized band, which means it is neither a deep bargain against mid-cycle earnings nor expensive against them. It is a bet that the current input-cost shock is temporary and that phosphate margin recovers. The methods that say expensive are pricing the present; the methods that say cheap are pricing a recovery that has not yet arrived.
Catalysts
The Q1 2026 results, reported in May 2026, are the load-bearing recent event and they were weak: a $258 million loss, adjusted EPS of $0.05 versus a $0.24 consensus, on revenue of $3.0 billion that narrowly beat. The cause was a sharp rise in sulfur and ammonia costs that pushed phosphate stripping margins below variable cost, prompting Mosaic to curtail about half the capacity at its Bartow and Louisiana plants, idle Brazilian SSP output, and withdraw its phosphate production guidance for 2026 (BigGo Finance; Stocktwits). Potash was the offset, with Canpotex fully committed through June and on a record pace.
The forward set is about cost normalization and capital discipline. Mosaic guided Q2 phosphate sales volumes of 1.4 to 1.7 million tonnes with DAP prices of $760 to $780 per tonne FOB, cut 2026 capital spending by $250 million to $1.25 billion, and initiated a workforce reduction targeting $50 million in annualized savings. The swing factors into the next prints are the path of sulfur and ammonia prices, whether and when curtailed phosphate capacity restarts, and continued potash strength. Analyst sentiment has moved lower, with one widely cited fair-value estimate cut from about $24 to roughly $19 (Simply Wall St; Seeking Alpha).
Sources: Mosaic Q1 2026 earnings coverage (BigGo Finance, May 2026); Stocktwits phosphate-guidance withdrawal; Seeking Alpha 2026 capital-plan coverage; Simply Wall St fair-value update (2026).
Peer Cohorts (Per Segment, With Filing Citations)
Phosphate / Potash / Mosaic Fertilizantes (reported)
- CF (CF INDUSTRIES HOLDINGS, INC.)
- (no filing in the citation store)
- UAN (CVR PARTNERS, LP)
- (no filing in the citation store)
- SMG (Scotts Miracle-Gro Co)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.