Salomon Upgrades Potash to 'In-Line'

Analyst David Driscoll sees improving margins amid tight global grain inventories

Salomon Smith Barney upgraded Potash Corp. (POT ) to in-line from underperform.

Analyst David Driscoll says his bullish view on Potash and the fertilizer sector is due to the expectation of improving volumes and margins owing to very tight global grain inventories, as well as improving utilization rates for nitrogen and phosphates. He believes Potash's phosphate margins will expand based on continued firm product prices and a decline in raw material costs beginning in mid 2003.

Also, he thinks Potash's nitrogen margins should expand due to value of its natural gas hedges. Driscoll raised the 2003 earnings per share estimate to $2.50, and upped the 2004 estimate to $3.15. He raised the target to $67.

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