Marking to Market Models Across Coverage

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Marking to Market Models Across Coverage

June 30, 2026 | 02:01 ET~

Fertilizers, Chemicals & Ag Equipment

Marking to Market Models Across Coverage Fertilizers, Chemicals & Ag Equipment

Joel Jackson, P.Eng., CFA Analyst

joel.jackson@bmo.com (416) 359-4250

Evan McCaul, CPA Senior AssociateBottom Line:

Evan.McCaul@bmo.com (416) 355-9069

Marking-to-market models after recent volatility. Amid the confusing current dynamic,

Jordan Smith, CFA Associatewe reiterate CTVA and CF as top picks and remain constructive on MOS and NTR (both

jordan1.smith@bmo.com (416) 558-9275

down YTD), and MEOH, CHE, and select lithium names. First, we think sentiment

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has turned overly bearish too quickly on crop input stocks. While we lower fertilizer

estimates and target prices, fertilizer stocks screen attractively ~5–6x 2027E EV/EBITDA

with forecasts at or only modestly above mid-cycle and valuations already discounting

bearish crop, weather, and demand outlooks. Second, nitrogen has seasonally reset,

potash remains firm, and phosphate/sulphur fundamentals should improve. Third, we

expect CTVA to benefit from separation-related multiple expansion (strong investor

interest for seeds/Vylor). Fourth, we raise target prices for CMP (salt prices faring well,

balance sheet improving) and BAYN (€49 target price assumes Crop Science gets valued

similarly as CTVA). Fifth, we see lithium-heavy ALB/SQM beating in Q2 despite spot

prices off recent peaks.

Key Points

Mark-to-market urea/nitrogen price walk-down, which occurred faster than

expected (de-risking CF/NTR/YAR) and assume ~$850/t Q3E Tampa sulphur.

• Maintain 2027E nitrogen assumptions, but reflect lower rest-of-year 2026E ASPs

as seasonality and apparent Strait reopening have already weighed on prices.