Even as growing global trade tensions and economic uncertainties have taken a toll on investors’ sentiments this year, some fundamentally strong stocks are outperforming the broader market — and Nutrien (TSX:NTR) is one of them. While the TSX Composite Index has barely budged this year, Nutrien has surged more than 20% to currently trade at $77.50 per share with a market cap of around $38 billion. At this market price, it also offers a 4% annualized dividend yield.
But the big question now is whether it can keep this up for the next three years. Before we take a closer look at Nutrien’s growth story and where its stock could be by 2028, let’s quickly review some key fundamental factors that might be driving it higher recently.
What’s been driving Nutrien’s stock higher?
The jump in Nutrien’s share price is mainly backed by its gradually improving fundamental outlook. For starters, global demand for crop inputs has remained solid in recent quarters despite economic headwinds. Fertilizer markets have firmed up lately, especially in potash and urea, due to limited global supply and improving fundamentals. In addition, Nutrien is benefiting from supportive agriculture trends like low grain stockpiles and strong planting expectations in North and South America.
Moreover, the company’s share buyback program could be another reason for adding another layer of investor confidence recently. Since mid-2024, Nutrien repurchased nearly six million shares and now has regulatory approval to buy back up to 5% of its outstanding common stock in the coming year.
Note that Nutrien’s first-quarter earnings report will be released on May 7, which could act as a short-term catalyst depending on how the numbers come in.
Performance trends point to a solid foundation
In 2024, Nutrien generated US$5.4 billion in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), with its adjusted earnings landing at US$3.47 per share. While this reflected a YoY (year-over-year) drop, it’s important to note that the decline was mostly due to weaker fertilizer prices, not a fall in operational strength.
In fact, the company’s retail segment stood out last year by posting a 16% YoY jump in adjusted EBITDA to US$1.7 billion.
Nutrien’s cost-cutting and network optimization moves are also starting to pay off. Notably, its potash and nitrogen volumes hit record or near-record levels in 2024, partly due to automation in its mines and fewer production disruptions.
So, where could Nutrien be in three years?
If things go as planned, Nutrien might look very different by 2028, and in a good way. The company is pushing ahead with its 2026 performance targets, which include higher fertilizer volumes, stronger retail earnings, and more efficient operations across the board.
Nutrien is also keeping capital spending under control. It plans to spend US$2 to US$2.1 billion this year, lower than in 2024, which gives it room to invest smartly without overextending. Part of that will go into expanding its proprietary product lines and digital retail tools, both of which could help it improve margins.
Clearly, Nutrien has the kind of scale and balance sheet strength that few agriculture input companies can match. And if potash and nitrogen prices continue to firm up in the next couple of years, the company’s profits could surge. That’s why, even after its recent run, Nutrien stock still has the potential to rally much higher over the next three years.
