We recently compiled a list of the 7 Best Agriculture Stocks to Buy Right Now. In this article, we are going to take a look at where Nutrien Ltd. (NYSE:NTR) stands against the other agriculture stocks.
Global Agriculture: Trends, Challenges, and Opportunities Ahead
The global agriculture market is currently experiencing significant changes driven by various factors, including population growth, climate change, and technological advancements.
According to a report by The Business Research Company, the global agriculture market was valued at $13.27 trillion in 2023. The market is expected to expand at a compound annual growth rate (CAGR) of 7.7% during 2024-2028 to reach a value of $19.28 trillion by the end of the forecast period. The agriculture market is primarily driven by the increasing demand for food due to a rapidly growing population, which is projected to reach 9.7 billion people by 2050 according to estimates by the United Nations.
Additionally, advancements in technology, such as precision agriculture and automation, are transforming farming practices, allowing for more efficient use of resources and higher crop yields.
The OECD-FAO Agricultural Outlook 2024-2033 highlights significant trends in the global agriculture market. Over the past 20 years, the demand for agricultural products has grown, primarily due to population and income increases in low- and middle-income countries. These nations have also boosted their production by adopting new technologies and better utilizing their natural resources.
Looking ahead, total consumption of agricultural and fisheries products is expected to rise by 1.0% annually over the next decade, mainly in low- and middle-income regions. Global food consumption is projected to increase by 1.2% each year, driven by population growth and rising incomes. Notably, the use of crops for animal feed is anticipated to grow faster than direct food consumption. This shift reflects a trend towards more animal-based diets, leading to increased livestock production.
In middle-income countries, daily calorie intake per person is expected to rise by 7% by 2033, fueled by higher consumption of staple foods, livestock products, and fats. On the other hand, low-income countries will see a modest 4% increase in calorie intake. This slower growth indicates challenges in achieving the Sustainable Development Goal of eliminating hunger by 2030.
High-income countries are also changing their dietary habits, with a slight decrease in fat and sugar intake as people become more health-conscious. Overall, these trends suggest that while there is growth in food consumption globally, disparities remain between different income levels.
Our Methodology
To compile our list of the 7 best agriculture stocks to buy right now, we used the Finviz and Yahoo stock screeners to find the largest agriculture companies. We also reviewed our own rankings and consulted various reports to compile a list of the best agriculture stocks.
From an initial pool of over 20 agriculture stocks, we focused on the stocks that analysts believe possess the greatest potential for growth. Finally, we ranked the 7 best agriculture stocks to buy right now based on their average price target upside potential according to analysts as of November 14, 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Nutrien Ltd. (NTR) The Best Agriculture Stock To Buy Right Now?
A farmer carrying a bag of fertilized over his shoulder signifying the fertilizers the company produces.
Average Upside Potential According to Analysts: 27.24%
Nutrien Ltd. (NYSE:NTR) is a Canadian agriculture and fertilizer company. It is one of the world’s largest producers of potash and nitrogen fertilizer. As a leading global provider of crop inputs and services, Nutrien Ltd. (NYSE:NTR) produces and distributes potash, nitrogen, and phosphate products for global agricultural, industrial, and feed customers.
During its Investor Day in June 2024, the company set ambitious performance targets for 2026 aimed at improving earnings and cash flow. Nutrien Ltd. (NYSE:NTR) has made significant progress and now plans to achieve $200 million in annual operational efficiencies by 2025, one year ahead of schedule. This efficiency will come from cost reductions across both retail and corporate sectors.
Nutrien Ltd. (NYSE:NTR) is strategically positioned to increase the production and sales of potash and nitrogen with minimal capital investment. The company aims to boost upstream sales volumes by 2 to 3 million tons compared to 2023 levels. Through the first 3 quarters of 2024, Nutrien Ltd. (NYSE:NTR) has already increased sales volumes by 1.3 million tons.
Financially, the company generated an adjusted EBITDA of $4.3 billion in the first nine months of 2024, supported by higher retail earnings, increased fertilizer volumes, and lower operating costs. As of November 5, 2024, Nutrien Ltd. (NYSE:NTR) also repurchased 1.5 million shares for approximately $75 million in the second half of 2024, demonstrating a commitment to returning value to shareholders.
With its focus on operational efficiency and strategic growth targets, Nutrien Ltd. (NYSE:NTR) presents a compelling investment opportunity in the agriculture sector.
Overall, NTR ranks 4th on our list of the best agriculture stocks to buy right now. While we acknowledge the potential of NTR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
