Agrium, Inc. (AGU) delivered net earnings of $4.54 per share in the second quarter of 2011, surpassing the Zacks Consensus Estimate of $4.21. The strong quarter was supported by record high crop prices and overall strong fundamentals for agriculture and the crop input market.
Recently, Agrium acquired Cerealtoscana S.p.A. (CT) and its subsidiary Agroport for $27 million plus working capital. The acquired business is included in the Wholesale operating segment. With strong markets across most products and services, Agrium expects a solid third quarter and believes industry fundamentals will remain robust in 2011.
Therefore, we have upgraded the recommendation from Neutral to Outperform with a target price of $85.00. This is 9.3x our 2011 EPS estimate.
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