Nutrien shares came under pressure after the fertilizer producer released first-quarter earnings as investors weighed volatile fertilizer prices tied to Middle East shipping disruptions and uncertainty around how long supply constraints could last. Analysts say tighter crop fundamentals, particularly in corn markets, are improving the longer-term outlook for fertilizer demand.
BNN Bloomberg spoke with Steve Hansen, managing director and equity analyst covering industrial products, chemicals and agribusiness at Raymond James, about why the firm upgraded Nutrien to “Outperform” and raised its target price to US$90 from US$74 amid improving agricultural fundamentals and expectations for stronger fertilizer pricing over time.
Key Takeaways
- Fertilizer markets remain volatile as conflict in the Middle East and disruptions through the Strait of Hormuz continue to affect global supply chains.
- Analysts expect fertilizer prices to eventually ease, but tight crop fundamentals are supporting a stronger medium-term outlook for the sector.
- Corn market fundamentals are improving as lower planted acreage and tighter supply conditions support farmer profitability and fertilizer demand.
- Potash demand remains strong because it is currently the most affordable major crop nutrient compared with nitrogen and phosphate products.
- Analysts expect longer-term agricultural trends and tightening crop markets, rather than short-term geopolitical price spikes, to be the main driver of Nutrien’s earnings outlook.
Read the full transcript below:
LINDSAY: Shares of Nutrien are under pressure after the Saskatoon-based fertilizer producer released its first-quarter results. The earnings come at a turbulent moment for global fertilizer markets, with the conflict involving Iran and the closure of the Strait of Hormuz disrupting shipping routes and driving prices sharply higher. Joining us now is Steve Hansen, managing director and equity analyst covering industrial products, chemicals and agribusiness at Raymond James. It’s great to have you with us. Thanks so much.
So Nutrien stock is down this morning after this report. What do you think is weighing on the stock today and on investors’ minds?
STEVE: Yeah, good question. I think the broader macro backdrop is volatile. Through this whole conflict period, there’s been upward pressure on some of their key product pricing. That’s been a beneficial windfall, particularly in their nitrogen business. Some of that would certainly ease if we get some clarity or resolution in the Middle East. I suspect that’s probably what’s weighing on the stock.
LINDSAY: How are you factoring in the possibility that the strait could reopen and fertilizer prices could come back down?
STEVE: Another good question. I think it’s really built into the numbers for most people. The question is ultimately the duration and how long it takes to play out. Elevated pricing has been with us for a period of time now. Even if the strait reopened tomorrow, it would take time to normalize supply chains and refill demand.
We’re in a key pinch point right now around the spring planting season, so demand is high. Ultimately, we do expect prices to fade over time. But beyond that, the underlying fundamentals look quite good. You’ve got a tightening crop backdrop, which is one of the most important drivers for the company’s business, and we expect that’s what ultimately helps propel the business into next year.
LINDSAY: I wanted to ask about that because crop fundamentals, especially for corn, are tightening. What does that mean for the industry and specifically for Nutrien?
STEVE: It’s really one of the most important drivers for the business. Farmer profitability and grower affordability are key, and corn is one of the biggest drivers of that, particularly in the domestic market. It’s the most fertilizer-intensive crop.
A tightening environment on both the demand and supply side should help farmers perform better through next year, and that ultimately helps Nutrien.
LINDSAY: What about new biofuel policies and weather risks like drought or El Niño? How does that factor into fertilizer demand over the next few years?
STEVE: Both are important. The new biofuel legislation or policy helps augment and bolster demand for corn domestically, and that supports pricing.
Weather is always the wild card. We’re heading into the critical spring planting season now. We’re effectively on track, or slightly ahead of pace, which is good news. It’s a little slower in Canada, but overall planting progress is moving along well and input demand remains high. Farmers still need crop protection products and crop inputs to support yields.
That pattern doesn’t appear to have been disrupted by the recent market challenges. As fertilizer values move higher, crop values should help support farmers’ purchasing power.
LINDSAY: Going back to the short-term spikes in prices because of what’s happening in the Strait of Hormuz, does Nutrien benefit more from those short-term spikes or from longer-term structural tightness?
STEVE: The short-term benefits are really just that — short term. The market tends to discount those variables and look through them. It certainly helps Nutrien’s balance sheet in the near term, but ultimately it’s the longer-term outlook for the business that drives the stock price.
You get a lot of volatility in the stock in the short term, but looking into next year, we do see that tightening crop backdrop as beneficial. As crop fundamentals improve, you should see more sustained pricing support for fertilizer products over time.
LINDSAY: According to an analyst at Scotiabank, some product volume metrics came in higher than expected, suggesting slightly weaker margins. Is that something you’re concerned about going forward?
STEVE: I’m not familiar with that specific reference, but what I would say is that they had record potash volumes in the quarter, which was very constructive. There’s very high demand for what is one of their core products right now.
Potash is the most affordable of the three key nutrients. Nitrogen and phosphate prices have become quite elevated, so farmers may be pulling back a little bit there. But potash demand looks very strong and the retail business is also holding up well. So I’m not too concerned.
LINDSAY: You also upgraded your rating on Nutrien to “Outperform” from “Market Perform” and raised your target price to US$90 from US$74. Walk us through your thinking behind those changes.
STEVE: Earlier this year, the key question was whether we would see another leg higher in pricing for the core wholesale fertilizer products — nitrogen and phosphate in particular. We just didn’t have enough evidence at that time that crop markets would support another move higher.
Now we’re starting to see those variables come into play. We’re seeing sustained tightening in crop fundamentals, which should ultimately drive the company’s earnings power higher over time.
Notwithstanding the volatility we’re seeing in overseas markets, we think the more important call here is the medium-term outlook and how that tightening crop backdrop supports Nutrien’s production and earnings profile.
LINDSAY: Nutrien’s earnings call begins in a couple of minutes. What will you be listening for?
STEVE: There are a number of key variables in play. One of the big questions is around the strategic review process. They’re in the process of trimming some of the non-core assets, so we’ll be looking for updates there.
We’ll also be listening for more detail on how the spring planting season is progressing because it’s the most important period of the year for the company.
LINDSAY: We’ll leave it there. That’s Steve Hansen, managing director and equity analyst covering industrial products, chemicals and agribusiness at Raymond James. Thanks for joining us.
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This BNN Bloomberg summary and transcript of the May 7, 2026 interview with Steve Hansen are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
