Potash Corp. (POT) has fallen recently as the price of corn has dropped, but the stock price appears to be over-correcting, writes Ticonderoga Securities analyst Mark Gulley. He upgraded the shares to Buy from Neutral.
“PotashCorp shares have over-corrected relative to the corn price according to our regression work,” Gulley writes. “Shares could rise $7/share just to get back to the current regression line,”
In addition, corn prices should rise in coming weeks.
“We believe the corn price can recover back to $7/bushel in the mid-term (i.e., by 2012 spring planting) where it traded for six weeks until the downdraft during September.”
Potash rose 5% in midday trading.
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