UBS analyst Roni Biron has downgraded his recommendation on Israel Chemicals Ltd. (TASE: ICL) from "Buy" to "Neutral", even as he raised his price target for the share to NIS 55 from NIS 50.
Biron said that recent developments in the potash market are good for the industry, though positive fundamentals are already reflected in ICL's share price, and consolidation plays are less relevant to the company.
Biron said he believes BHP’s bid for Potash Corp (PCS), prospects of potash consolidation in the former Soviet Union (FSU), and a spike in wheat prices are potential positives for the potash market.
The analyst explains that BHP buying its way into the potash space rather than adding capacity could alleviate concerns of over-supply. Any FSU consolidation that takes place could improve price discipline, and higher grain margin should stimulate demand.
The price of Israel Chemicals shares rose 6.65% yesterday, and have pulled back about 1% by late morning today.
Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2010
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