MOSAIC CO (MOS): what the price assumes

boothcheck covers MOSAIC CO (MOS) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/MOS

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

The price is supported by asset-based and earnings-power and growth-DCF value. A value/asset-supported name, not a pure growth bet.

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.

Families that justify the price: Asset, Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.

Per-Model Detail (n=6)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

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.)
• FY2025 10-K: …0001324404 false 2025 FY http://fasb.org/us-gaap/2025#CostOfRevenue http://fasb.org/us-gaap/2025#CostOfRevenue http://fasb.org/us-gaap/2025#CostOfRevenue P1Y P1Y P1Y 265 iso4217:USD xbrli:shares iso4217:USD xbrli:shares cf:Manufacturing_complex xbrli:pure utr:T iso4217:CAD cf:Pension_plan cf:retiree utr:MMBTU…
• FY2025 10-K: …ITEM 16. FORM 10-K SUMMARY. None. 118 Table of Contents CF INDUSTRIES HOLDINGS, INC. EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 2.1 Agreement and Plan of Merger, dated as of July 21, 2005, by and among CF Industries Holdings, Inc., CF Merger Corp. and CF Industries, Inc. (incorporated by reference to Exhibit 2.1 to…
• UAN (CVR PARTNERS, LP)
• FY2025 10-K: …commands a premium price to urea and ammonia, on a nitrogen equivalent basis. The nitrogen fertilizer products we produce are globally traded commodities and are subject to price competition. The customers for our products make their purchasing decisions principally on the basis of delivered price and, to a lesser…
• FY2025 10-K: , National Primary Drinking Water Regulations ("NPDWR") for PFAS, adding individual PFAS and PFAS categories to the Toxic Release Inventory, and increasing efforts on air related PFAS information collection and measurement of air emissions. In May 2025, the EPA announced it will retain two PFAS compounds ("PFOS" and…
• SMG (Scotts Miracle-Gro Co)
• FY2025 10-K: …and food supply and to expand cleanup efforts to remediate the impacts of PFAS pollution. In 2021, the federal government announced a multi-agency plan to address PFAS contamination nationwide. Further, in April 2024, the U.S. EPA designated two PFAS chemicals - perfluorooctanoic acid ("PFOA") and…
• FY2025 10-K: …that the presence of such regulated materials at any such locations, or locations that we may acquire in the future, will not result in liability to us under such laws or regulations or expose us to third-party actions such as tort suits based on alleged conduct or environmental conditions. Regulatory agencies around…

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.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• 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.