ANALYSIS: Commerzbank sees falling balance sheet risks for K + S shares high on ‘Buy’ | 11/27/20


FRANKFURT (dpa-AFX) – The prospects for the fertilizer group K + S (K + S) have improved according to Commerzbank estimates. Unexpectedly high proceeds from the sale of the US salt business and the billions in depreciation in the third quarter would have reduced the fertilizer company’s balance sheet risks, said analyst Michael Schäfer from Commerzbank in a study published on Friday.

In addition, according to Schäfer, the agricultural environment is brightening noticeably. For example, the prices for corn and palm oil have recently risen significantly. This improves the prospects for the people of Kassel, as it should also drive the demand for fertilizers. The company also gave an encouraging outlook for the years 2021 and 2022.

Overall, after the sale of the American salt business, the fertilizer division should now dominate events at K + S, the expert continued. The group should also succeed in gradually reducing costs.

Against this background, Schäfer upgraded the K + S shares from “Hold” to “Buy” and raised its price target from 7 to 10 euros. The analyst thus gives the shares significant upside potential. They rose on Friday by almost six percent to 7.94 euros.

With the “Buy” rating, the analysts at Commerzbank assume that the share has the potential for a total return of more than 20 percent. The course target relates to a period of twelve months./edh/la/mis

Analyzing institute Commerzbank.

Publication of the original study: November 27, 2020

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