National Bank downgrades Nutrien stock rating on valuation
National Bank Financial has reduced its rating on Nutrien (NYSE:NTR) stock to Sector Perform, reflecting a higher valuation than previously assessed. The downgrade comes after a 14% rise in the stock price since the initial rating in July. Nutrien has shown strong performance this year, with a 7% return over the past week and a 22% gain year-to-date.
However, the Relative Strength Index (RSI) indicates the stock is now overbought. The downgrade is based on Nutrien trading at a lower multiple than its peers, with an estimated EBITDA and free cash flow yield slightly lower than the average for the comparable group of fertilizer, chemicals, and agricultural retail and distribution companies.
Despite the downgrade, the stock remains slightly undervalued according to InvestingPro analysis, offering a reasonable P/E ratio of 14.97 and a low PEG ratio of 0.19.
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