Consider buying the retracement on Nutrien at $80 as EPS grows

By: Motiur Rahman
Motiur Rahman
Md Motiur is a Financial Analyst at Invezz covering the North American, European and Asian stock markets. He has… read more.
on Jun 23, 2022
  • Nutrien manufactures farm inputs which are in high demand as the world fears global food shortages.
  • The company is projected to record more than 40% growth in EPS by the end of this year.
  • The stock is a buy at $86.

Nutrien Ltd (NYSE:NTR) is trading at $86 and has gained 3.91% this week. At the price, Nutrien has a forward PE of 10.64 and a PEG ratio of 0.61. The 52-week range for the stock is between $57 and $117. The stock is currently trading almost in the middle of that range. We think that Nutrien Ltd is undervalued. The price is expected to appreciate as the fundamentals remain solid.

Nutrien is a manufacturer of farm inputs rich in potash, nitrogen, and phosphates. The company does business in Canada, the United States, South America, and Australia. As the fears of food shortages grow, the company is ramping up production to meet demand.

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The company is projected to record EPS at $7.82. That represents a growth from the last period when EPS was $5.48. The growth rate is more than 42% this year alone. The dividend yield of the stock is 2.19. These factors make the large value Canadian company highly attractive in the bear market.

Nutrien Ltd may find support at $80 despite the bear market

Source – TradingView

Analysis of the price chart indicates that Nutrien Ltd faced resistance at $80 in February. It shot to the high of $117 by April. Since then, the stock has been pulling back to the current level of $86. Last week, the stock hit a low of $82.53. We project that the stock will not dip below this level. That means that the price of $86 is near the bottom. The stock is a buy.

Summary

Nutrien Ltd is a buy at $86. The company found support at $80. Fundamentally, the stock is strong as the company expects more than 40% growth in EPS this year.

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