Smart investors know that recoveries create some of the best investment opportunities, and Nutrien (TSX:NTR) may be one of them. After a rough two-year decline of 35%, NTR stock is showing strength in early 2025 with an 11% rebound, outperforming the market. Now trading at $71.32 per share with a $35 billion market cap, Nutrien’s strong start to the year has reignited investor interest as it also offers a 4.2% annualized dividend yield.
However, is this rally sustainable? In this article, I’ll break down Nutrien stock’s financial performance and fundamental growth prospects, which should help you gauge whether its early 2025 momentum can continue. But first, let’s understand what really went wrong for NTR stock over the last couple of years.
Why Nutrien stock fell in the last couple of years
The past two years haven’t been kind to Nutrien shareholders, and there are a few key reasons behind this rough patch. First, global fertilizer prices have weakened in recent years, taking a toll on Nutrien’s revenue and earnings. The company’s potash and nitrogen segments saw lower net selling prices, which ate into profits. In fact, in the first nine months of 2024, its potash segment’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) dropped to US$1.6 billion. On top of that, demand fluctuations, especially in Brazil and other international markets, led to lower sales volumes for crop nutrients.
Second, Nutrien had to deal with some operational hiccups. The company revealed that weather-related production issues affected its phosphate segment, and unexpected outages in its nitrogen facilities hurt its sales guidance. In addition, in the first three quarters of last year, a foreign currency derivative loss of US$220 million in Brazil pressured its profitability. All of these negative factors triggered a selloff in NTR stock. But despite these short-term challenges, there are many reasons Nutrien stock still looks like a great stock to buy in 2025.
Strong signs of a turnaround
Despite the turbulence, Nutrien has been making steady progress in key areas. For example, its potash sales volumes hit record highs, with 11.1 million tonnes sold in the first nine months of 2024. This surge helped offset weaker prices to prove that global demand remains strong.
Similarly, the company’s retail segment also showed resilience as the division’s adjusted EBITDA rose to US$1.4 billion in the three quarters of the year, supported by higher product margins in North America. Meanwhile, Nutrien’s cost-saving efforts are also likely to boost its profitability as it now expects US$200 million in annual savings by 2025, ahead of schedule.
NTR stock’s outlook for 2025
One of the biggest reasons to be optimistic about NTR stock’s outlook is improving conditions in the agricultural market. As North American crop nutrient demand gradually strengthens and global grain stocks remain below historical averages, fertilizer sales could strengthen in 2025.
Also, Nutrien has increased its focus on optimizing its supply chain, expanding fertilizer production, and growing its high-margin retail segment, which should accelerate its financial growth in the coming years. Given these positive factors, I wouldn’t be surprised if NTR stock stages a strong rally in 2025 and beyond.
