Shares of Canadian agricultural commodity producer Nutrien (TSX: NTR) have been on a nasty multi-year slide, now down close to 47% since its 2022 peak. Undoubtedly, the brutal bear market has been most unkind to investors. And with Trump tariffs looking to add yet another headwind in the face of the firm, you’d think the stock would be closer to all-time depths going into the month of April. Surprisingly, shares of NTR are actually faring quite well so far in 2025 despite Trump tariff threats and fears of a Canadian recession.
Year to date, the stock is up just shy of 16%. While such an impressive gain is completely dwarfed by the decline that precedes it, I still think the stock may have been hit by so much that additional tariff concerns may not have all too large of an impact on the stock.
Indeed, whenever you have expectations that have essentially been dropped to the floor, it can be tough to move the needle meaningfully lower. As that saying goes, it’s always darkest before dawn. And while things could certainly get worse for Nutrien before they get better as tariffs are thrown into the mix, I think that the long-term thesis remains intact.
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Nutrien looks way too cheap
At the end of the day, the stock is trading at a bargain-basement valuation, and secular tailwinds could begin to work their way into the name again once the dust has a chance to settle and the worst of tariff fears are baked in (I don’t think we’re quite there yet). In any case, I’m not against stashing the name on a watchlist or nibbling on a tiny starter position at around $75 and change per share while it’s yielding more than 4%.
Nutrien is one of the best fertilizer plays out there, with some enviable economies of scale working on its side. Though there’s no telling when agricultural commodity prices will rocket higher again, I continue to believe that the demand for higher crop yields remains one pronounced ultra-long-term trend — one that should have the full attention of Canadian deep-value investors with a 10 (or more) year horizon.
Could Nutrien stock fare well in 2025? Or is it time to take some profits off the table?
Personally, I think Nutrien has what it takes to add to its impressive start to the year. Of course, a no-tariff scenario and the avoidance of a Canadian recession would be a bull-case scenario of sorts. Though it’s better to bet on more of a base-case scenario than a bull one, I think the potential upside from the former may be heavily discounted at these depressed prices. With expectations for muted fertilizer prices and modest earnings growth on the retail side, I believe there’s a bit of room to impress.
In any case, I’m sure the pains of U.S. farmers could be enough to incentivize the reduction or elimination of tariffs on fertilizers. For now, the 4.12% yield looks to be worth collecting as investors wait things out. Sure, it could be a choppy year, but if things go right for a change, I’d not be surprised if shares find a way past the $80 mark by year’s end. As such, I view the name as a buy, but only for those willing to average down on further tariff-fuelled weakness.
