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Mosaic (MOS) Could Be 28% Undervalued On Sulfur Supply Cuts

Simply Wall St · 1d ago

Mosaic (MOS) is dealing with a supply shock after the closure of the Strait of Hormuz disrupted sulfur deliveries, pressuring costs and prompting phosphate production cuts that contrast with peers returning more cash to shareholders.

Recent trading has reflected these pressures on Mosaic. The share price is now at US$19.18 after a 1-day share price gain of 1.75%. However, the 30-day share price return is down 23.86% and the 1-year total shareholder return has declined 33.61%, suggesting momentum has been fading as investors reassess cost risks and production cuts in relation to longer term fertilizer demand and valuation debates.

Compare Mosaic's supply squeeze and cost pressures with other producers by scanning our hand picked list of list of solid balance sheet and fundamentals (25 results).

Mosaic now trades near US$19 after a steep slide, and the sulfur shock is already in the price. Does it make more sense to lean into the stress today, or to wait for a cleaner entry once the dust settles on valuation?

Most Popular Narrative: 28% Undervalued

Mosaic's most followed narrative puts fair value at $26.77, well above the recent $19.18 close. This frames the current sulfur shock as a valuation debate rather than just a crisis story.

Global phosphate underapplication in North America and Brazil, combined with Mosaic's view that sulfur driven supply constraints could leave 2026 production up to 30 million tonnes below last year, sets up potential volume and pricing recovery when nutrient application returns to more typical levels, which would affect revenue and earnings.

See why 41 investors see Mosaic as 28% undervalued.

Result: Fair Value of $26.77 (UNDERVALUED)

Still, the Mosaic narrative can crack if sulfur costs stay elevated for a prolonged period, keeping U.S. phosphate capacity idle and cash generation trailing investment and dividends.

Find out about the key risks to this Mosaic narrative.

Next Steps

If Mosaic's sulfur shock and valuation gap leave you undecided, act quickly to review the data yourself and stress test your own thesis using 3 key rewards and 3 important warning signs.

Looking for more Mosaic-sized investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.