巴克莱-美股农业综合企业行业-在化肥领域打下新根基-2022.6.1-54页.docx

Equity Research 1 June 2022 Americas Agribusiness Laying down new roots in Fertilizers We initiate coverage on five fertilizer and other ag supply companies. We initiate with an OW rating on CTVA and NTR, EW on CF and ICL, and UW on MOS. We see lasting supply/demand tightness beyond 2023, which bodes well for the broader group despite recent outperformance against major indexes. We appreciate your consideration in the Institutional Investor All-America All-Canada Research Survey 2022. View our analysts. Vote for Barclays. Squeezing our way into a tight market: Low supply and high demand for agricultural products has led to outsized profits for farmers, fertilizer companies, and ag processors. Demand remains strong across the board and current stocks-to-use ratios continue trending down. Despite significant outperformance among the broader group compared to US equity indexes, we see strong fundamentals beyond 2023 and hence are selectively optimistic on the group. We initiate NTR and CTVA with an Overweight rating, CF and ICL with an Equal Weight, and are only slightly more cautious on MOS, starting with an Underweight. Overall we are constructive on the companies’ potential to maintain a strong profit momentum. We see tightness in both the grain and fertilizer markets lasting beyond 2023; any return to normality, we believe, would have to come from an end to sanctions over time rather than declining demand, as we believe demand pull will remain elevated. Main demand drivers are: 1) relatively stable livestock herds globally, 2) continued population growth requiring more food with less resources, and 3) increased demand from the biofuel segments. Supply growth is limited, exacerbating current tightness: In terms of global crop acreage, there was an uptick observed in 2020 and 2021. A record of 2.43bn acres were harvested last year. From 2019 to 2021, the total acreage increased minimally by 3.7% (+73M acres). The expansion over the past couple of years (2016-2021) w