Agrium shares tumble after price target slashed

'Bear market' leads analyst to slash price target on fertilizer maker Agrium; stock tumbles

NEW YORK (AP) -- An analyst Friday slashed his price target for Agrium Inc. as the fertilizer maker's strong fundamentals succumb to "bear market conditions."
RBC Capital Markets analyst Fai Lee cut his price target to $105 from $145 because of "higher market risk premiums, portfolio rotation due to investor sentiment resulting in a broad sell-off in commodity-related stock and distressed liquidations."

Lee, who has an "Outperform" rating on the stock, cited as "attractive" its free cash flow yield, a metric that gauges cash a company can generate after maintaining or expanding its asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value.

The analyst also said the sector's fundamental's are strong, citing high crop prices, low grain inventories and high fertilizer prices.

However, those positive fundamentals are being overwhelmed by "current stock market conditions and change in investor sentiment towards commodity-related stocks," he wrote.

Shares of the Calgary, Alberta-based company plummeted fell $10.85, or 14.5 percent, to $64 as oil, copper and chemical companies all suffered share price declines.