Why Mosaic Stock Flopped on Friday

A post-earnings analyst recommendation downgrade didn't do any favors for Mosaic (NYSE: MOS) at the end of the trading week. The crop nutrients producer's share price was dinged by more than 4% that day as a result.

Knocked down a peg

That morning, Kristen Owen of Oppenheimer moved her Mosaic recommendation down one peg. It's now set at perform (hold, in other words), where previously Owen had flagged it as an outperform (buy). She also removed her $35-per-share price target on the agricultural products stock.

It was no accident that Owen's move came one day after Mosaic published its preliminary fourth-quarter results. According to reports, the analyst felt the company underperformed during the period. While she's optimistic that it will continue to improve in terms of operating rate, she doesn't see any clear catalyst that would significantly improve the fundamentals.

Owen pointed out that weakness in Mosaic's customer base isn't limited to the U.S. Demand from clients in Brazil, a huge market in its own right, is also weak.

Growing along with the market

It almost goes without saying that the fortunes of pure-play agricultural input producers like Mosaic are reliant on crop production in the markets they serve. Like Owen, I don't see any sudden occurrences that would juice production, so perhaps it's wise to avoid the stock at the moment.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.