Agrium Inc. (AGU) has received approval from the TSX to buy back up to 5% of its currently issued and outstanding common shares in the next 12 months.
CreditSights said the fertilizer producer’s healthy free cash flow and cash available on its balance sheet should allow it to fund the repurchase plan without having to issue additional debt.
The 7.9 million shares equate to a cost of $434-million at Wednesday’s closing price of $54.90 in New York.
The fixed income research firm told clients:
Despite continued strong earnings outlook in the foreseeable future, high-beta fertilizer names have been punished recently in the equity markets.
They noted that Agrium shares have plummeted more than 50% from its June 23 high.
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