Leading global fertilizer producer and agricultural inputs retailer Nutrien (TSX: NTR) may be a compelling value stock to consider as its sales volumes and margins recover in 2025. Following a cost-cutting drive, challenges in Brazil, and weaker fertilizer prices over the past several quarters, rays of hope have returned to Nutrien’s markets, and long-term-oriented NTR stock investors may see better returns next year.
Tighter cost controls, management’s commitment to shareholder returns, and improving fertilizer market fundamentals could support a recovery in Nutrien stock in 2025. Apparently, five key factors stand out in support of a potential turnaround for NTR stock over the coming year.
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5 factors to move Nutrien’s stock price in 2025
Share repurchases and dividend growth top Nutrien’s shareholder returns agenda in 2025, while a market recovery in Brazil, a robust global potash market, a resilient nitrogen market, and China’s export controls on fertilizers could help propel Nutrien into a better operating spot in 2025. Let’s see how.
1. Nutrien’s commitment to stock repurchases and dividend growth
Nutrien expects to continue aggressively repurchasing shares in 2025, having already bought back US$75 million worth in the second half of 2024. This buyback program should provide support for the stock price. Management is prioritizing share repurchases as a way to improve the company’s free cash flow per share.
“The buyback is compelling to us,” said Mark Thompson, Nutrien’s CFO, during an earnings conference call earlier this month. In a current normal course issuer bid (NCIB), Nutrien has authorization to repurchase up to 24,728,159 shares by February 28, 2025. It used more than US$370 million to repurchase shares in a prior NCIB that expired earlier this year.
Nutrien has also raised its dividend for several consecutive years, with the payout growing by 35% since 2018. Thanks to the 23% decline in share count due to repurchases, annual dividend payouts remain around US$1 billion. Bay Street analysts project a 2.8% dividend raise for 2025. The current quarterly payout yields 4.6% annually.
2. Brazil-led retail recovery
The company’s retail segment, which generates 70% of revenue and 27% of adjusted earnings before interest, depreciation, and amortization (adjusted EBITDA), saw some softness during the third quarter of 2024 due to reduced pest pressure and lower field activity in North America. However, strong demand is expected to return in 2025, especially in the recovering Brazil market where Nutrien is a leading agricultural inputs provider.
Brazil’s fertilizer demand may have already returned to historical record levels this year, and 2025 could be a strong selling season for Nutrien and a recovery pad for its stock price.
3. Robust potash outlook
Nutrien is seeing record sales volumes for potash this year and raised its 2024 potash sales volume guidance to 13.5–13.9 million tonnes in November, citing low inventories and strong affordability. With limited new supply capacity on the horizon, potash prices and margins could rise in 2025 and remain elevated.
The potash segment contributes the most to Nutrien’s segmented adjusted EBITDA at 34.6% during the past 12 months.
4. Resilient nitrogen fundamentals
While nitrogen net selling prices declined in 2024, Nutrien still expects respectable nitrogen adjusted EBITDA this year as input costs dropped with lower natural gas prices in North America. Tight global urea and ammonia markets, coupled with low U.S. inventories, should underpin nitrogen profitability in 2025.
Nutrien’s nitrogen segment made the second-highest adjusted EBITDA contribution at 30.9% during the past 12 months.
5. China’s fertilizer export controls
China’s continued restrictions on fertilizer exports are tightening global supply, especially for phosphates. This could be beneficial for the global pricing of Nutrien’s fertilizer products during the next year.
Where Will Nutrien Stock Be in 2025?
Although unpredictable weather events may impact Nutrien’s revenue, earnings, and cash flow, the company could see a recovery in these metrics in 2025.
The company’s disciplined capital allocation, diverse earnings streams, and favourable industry dynamics could support Nutrien’s stock price recovery as operations enter a new sustainable revenue and cash flow growth path next year. Shares trade cheaply at a price-to-free cash flow multiple of 9.9, which compares favourably against an industry average of 15.1.
If noted variables play along, Nutrien stock could rise gradually over the next 12 months towards an average analyst price target of $81.49, which represents a 25% potential upside from current levels.
