Merrill Lynch reiterates its "Overweight" recommendation for EMEA fertilizer companies and gives Israel Chemicals Ltd. (TASE: ICL) a "Buy" rating in a new review of the industry. The investment bank says it remains confident on the 12-month outlook for Israel Chemicals, which is 10% ahead of the earnings per share consensus for the company.
Merrill Lynch stock picks include Israel Chemicals, Germany's K+S Group AG (Nasdaq: KUNAF; XETRA: SDR), and Norway's Yara Ynternational (Nasdaq: YRAIF; OSE: YAR). Merrill Lynch notes rising prices for commodities coupled with problems on the supply side of fertilizers, which is driving prices upwards.
Merrill Lynch analyst Haim Israel gives Israel Chemicals a target price of NIS 90, thanks to rising potash prices. He warns that the company is heavily exposed to oil and crude oil prices, as well as marine transportation rates. He also notes that market growth is sensitive to agricultural commodity supply volume and prices, which are volatile due to the weather in specific areas, crop prices and inventory build-ups.
Israel Chemicals opened at NIS 76 today and was down 1.3% by midday.
Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2008
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