Agrium Inc. (NYSE: AGU - News), based in Alberta, Canada, is a major retailer of agricultural products and services in North and South America, a leading global wholesale producer and marketer of all three major agricultural macronutrients such as nitrogen, potash, and phosphate, and a premier supplier of micronutrients and specialty fertilizers.
Agrium is growing through acquisition and organic expansion. The acquisition of United Agri-Products is driving revenues and profits supported by an expanded product line in the major business segment. However, the company is witnessing weak demand and prices for its fertilizers.
Nonetheless, Agrium expects the fall in demand and prices to be temporary. The company has reaffirmed its earnings guidance for the second half of fiscal 2008. The company also has a significant free cash flow. Therefore, we rate the shares a Buy with a target of $43.00.
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