Is Nutrien Stock a Buy, Sell, or Hold for 2025?

Nutrien is down 10% this year. Is the stock oversold?

| More on:
A steel grain silo storage tank with solar panel in a yellow canola field in bloom in Alberta, Canada.

Source: Getty Images

Nutrien (TSX:NTR) is down about 10% in 2024. Contrarian investors are wondering if NTR stock is now undervalued and good to buy for a self-directed portfolio focused on dividends and total returns.

Nutrien share price

Nutrien trades for close to $68 on the TSX at the time of writing. The stock is above the 12-month low of around $61 but is way off the $140 it hit in early 2022 when war broke out between Russia and Ukraine.

Nutrien is a major player in the global crop nutrients sector.

The stock initially surged in 2022 due to concerns that Russian and Belarus producers of potash would see their ability to supply global markets severely restricted. Potash prices spiked to US$1,200 per tonne when the war broke out but declined through the rest of 2022 and continued to slide in 2023. Through most of 2025, the price has been close to US$300. Investors are hoping a bottom is forming and that the next upward leg in the commodity cycle could be on the way next year.

Nutrien earnings

Nutrien reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$1.01 billion in the third quarter (Q3) of 2024 compared to $1.08 billion in the same period last year. For the first nine months of 2024, adjusted EBITDA came in at US$4.30 billion compared to US$4.98 billion in 2023.

Weak prices for the commodities have largely been the story in 2024. Retail results slipped in Q3, but the division delivered a 10% gain in adjusted EBITDA for the first nine months of the year.

Potash sales hit record volumes in the first three quarters of 2024, but the lower prices resulted in a 20% drop in adjusted EBITDA to US$1.56 billion, although the decline in Q3 was just 9%.

Nitrogen adjusted EBITDA slipped 8% for the first nine months of the year, but there was a 21% increase for Q3 due to better pricing, so things could be turning the corner in the nitrogen market.

Phosphate-adjusted EBITDA fell 12% in the first three quarters of the year. The Q3 results came in essentially flat compared to Q3 2023.

Outlook

Weather, currency markets, and crop prices all impact demand for Nutrien’s products. As climate change leads to more severe weather conditions, the coming years will likely see more volatility. Longer and more severe droughts will combine with larger and more frequent storms to impact the global agriculture industry.

In the Q3 report, Nutrien said favourable growing conditions in the U.S. this year should put farmers in a good financial position heading into 2025. That tends to support solid fertilizer, seed, and crop protection demand for the next planting season.

On the wholesale side, Nutrien raised its 2024 global potash shipments forecast to 70-72 million tonnes, driven by better demand in Brazil and Southeast Asia. Nutrien expects 2025 global potash shipments to be 71-74 million tonnes. Limited new capacity is expected to come online, so prices could drift higher in 2025 on demand growth.

Phosphate and nitrogen could also see improved prices, driven by project delays and supply outages. Nitrogen inventory in the U.S. was estimated to be below average levels in Q3, according to Nutrien, so there could be a demand boost in the first part of the year.

Over the long run, rising populations will boost demand for food. At the same time, urban sprawl will continue to consume farmland. In addition, the expansion of the middle class in heavily populated emerging markets will increase demand for meat, leading to rising demand for animal feed.

As such, the big picture should be positive for Nutrien.

Should you buy now?

The market appears to be stabilizing ahead of 2025. Contrarian investors might want to start nibbling on Nutrien at the current level. You can pick up a decent 4.4% dividend yield today while you wait for the rebound.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Nutrien. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.

More on Metals and Mining Stocks

A plant grows from coins.
Metals and Mining Stocks

3 Gold and Silver ETFs for Tariff-Wary Investors

These gold and silver funds can help you diversify cheaply.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

The Best Canadian Dividend Stocks to Buy and Hold Forever in a TFSA

TFSA investors can avoid the need to fly to safety during market turns by owning the best Canadian dividend stocks.

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Best Stock to Buy Right Now: Barrick Gold vs Agnico Eagle?

Agnico-Eagle Mines stock continues to soar off of strong results while Barrick Gold grapples with political troubles in its African…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Stocks for Beginners

What to Know About 2 Canadian Mining Stocks for 2025

Mining stocks can be a strong investment, or a bit of a wild ride. So where do these two top…

Read more »

nugget gold
Metals and Mining Stocks

2 Gold Stocks to Consider in the Wake of Trump Tariffs

Investing in gold mining stocks such as Kinross can help you diversify your portfolio and lower overall risk.

Read more »

Metals and Mining Stocks

Value Hunters: It’s Time to Snap Up These TSX Gems

Investing in undervalued gems such as MAG Silver should help you beat the broader markets in 2024 and beyond.

Read more »

A plant grows from coins.
Stocks for Beginners

3 Top Basic Materials Sector Stocks for Canadian Investors in 2025

These three Canadian stocks certainly have a strong future ahead, and now might be time to buy the dip.

Read more »

todder holds a gold bar
Stocks for Beginners

Outlook for Barrick Gold Stock in 2025

Gold stock Barrick may have proven itself in the past, but with geopolitical issues on hand, should investors move elsewhere?

Read more »