Agrium Started as a “Buy” at Deutsche Bank (AGU)

in Gold Gold Investment by admin — March 5, 2010 7:13 am | no comments

Fertilizer maker Agrium Inc. ( AGU ) saw its coverage started on Friday with a “Buy” rating by analysts at Deutsche Bank. The analyst also set an $85 price target on AGU shares, which had closed at $67.18 on Thursday. The firm noted that “While Agrium is poised for a strong earnings rebound in 2010, similar to its peers, we believe unique earnings growth and stability as the leading North American retailer of agricultural inputs set Agrium apart. With over 900 US retail centers (3x its nearest rival) offering a full range of seed, fertilizer, chemical, and advisory services Agrium has not only greater diversity and margin stability, but unparalleled real-time insight into US grower economics and behavior. We expect a continuation of Agrium’s roll-up strategy will propel Agrium Retail from its current 14% retail market share toward its 30% goal…Our confidence in the risk/reward balance is deepened by broad-based earnings growth (spanning nutrients, seeds, chemicals and services) driven largely by opportunities unique to Agrium, lessening dependence on any one product or price. Finally, Agrium’s strong balance sheet and cash flow further bolster the margin of safety.” Agrium shares rose $1.46, or +2.2%, in premarket trading Friday. The Bottom Line Shares of AGU have a dividend yield of .16%, based on last night’s closing stock price of $67.18. The stock has technical support in the $60-$61 price area. If the shares can firm up, we see overhead resistance around the $70-$72 price levels. We would remain on the sidelines for now. Agrium Inc. ( AGU ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .