2023-12-15 08:39:00 ET
Nutrien Ltd (NYSE:NTR) sells potash, phosphates, and nitrogen-based products. The product portfolio includes fertilisers and pesticides. Being in the agricultural segment means the stock may not be ideal for momentum and growth investing styles. However, Nutrien is a good candidate for a value investing strategy.
The agricultural stock is trading at $55. At the price, Nutrien has a price-to-earnings ratio of 13.19 based on last year’s earnings. The company is expected to post $4.83 in EPS in the current year. The projected EPS growth for the medium term is 8%. That places the PEG ratio at 1.43, signalling that the stock could be slightly overvalued. However, a deeper analysis of price performance shows that the company could still have opportunities.
The 52-week range of the price is between 52.23 and 85.16. Therefore, Nutrien is trading close to its 52-week lowest valuation. A factor for the low price is that earnings growth did not meet expectations in the last four quarters. Nonetheless, the fundamentals of the company remain strong.
Nutrien stock has support at $52 and is set to gain
Technical analysis shows that Nutrien has support at the valuation of $52. The support level has been held year-to-date. Therefore, the price is likely to stay above the support level, upon which it will pivot for further gains.
A reading of the moving averages shows the 200-day average at $56.43. The 20-day and 50-day averages are about $55 and will cut the 200-day from below. The movement could trigger gains in the price. Historical trends show the intersection as a critical buying point for the stock.
Our analysis points to a possibility that Nutrien will gain towards a valuation of $65. The projection is based on the technical indicators. Factoring expectations about upcoming earnings dates early in the year is also vital. Also, considering that Nutrien has an attractive dividend yield of 3.84%, the stock’s potential is huge.
Summary
Nutrien is a good investment candidate for value investors. Analysis shows considerable earnings growth expectations of 8%. The share is likely to appreciate from the current levels as the moving averages move towards convergence.
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