Fertilizer companies' aggressive pricing policies are undermining the market equilibrium and could affect demand.
Clal Finance Batucha Ltd. has cut its price target for Israel Chemicals Ltd. (TASE: ICL) to $20.10, or NIS 72.60, from its previous target of NIS 86. The investment house cites "rising questions" as the reason for the cut, but nevertheless reiterated its "Outperform" recommendation. The share fell 5.5% by early afternoon.
The new price target is 32.3% above Israel Chemicals opening price of NIS 56, but 15.6% less than the previous target price set just a month ago. Clal Finance said, "Fertilizer companies are going are pulling the rope taut, and we're not sure that it won't snap."
Clal Finance noted that fertilizer companies' aggressive pricing policies were undermining the market equilibrium and could affect demand, even though 2008 is shaping up to be a historic year for farmers. Fertilizer companies are the soul of the party, together seed and crop protection companies.
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2008
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