WD-40 COMPANY
| Revenue | $674.7M |
|---|---|
| Operating income | $89.9M |
| Net income | $67.8M |
| Free cash flow | $50.9M |
| Operating margin | 13.3% |
| Net margin | 10.0% |
| Return on equity | 24.3% |
| Period | TTM 2026-05-31 |
OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong cash generation and shareholder returns outweigh near-term volume and margin risks.
Buy: Mosaic produced $3.64 of adjusted EPS, $2.0 billion of adjusted EBITDA and $794 million of free cash flow in Q2, while returning $667 million to shareholders and authorizing another $2 billion buyback. The fertilizer supply deficit—roughly 12 million tons of lost Russian and Belarusian potash exports and potentially 5 million tons of lost Chinese phosphate exports—supports strong conditions into 2023, but peak margins, delayed demand and operational volatility make this a cyclical buy rather than a low-risk compounder.
- Fertilizer Supply Constraints
- Potash
- Phosphates
- Brazil Fertilizantes
- Capital Returns
- K3 Capacity
Near term
North American fall application should be normal, but late planting and harvest could shift sales from Q3 into Q4.
Brazilian inventories are elevated after first-half imports rose about 30% year over year; management is relying on customer prepays and strong crop economics to absorb them in the second half.
Phosphate pricing has moderated from Q2, with only about 25% of Q3 volume sold and priced; Q3 realized pricing is expected to track current spot levels less freight.
Brazil customer prepayments rose about $830 million in the first half, with 50%–75% expected to reverse in Q3, creating working-capital and financing volatility.
The company plans to retire $550 million of long-term debt in the second half and continue returning essentially 100% of post-investment, post-deleveraging free cash flow.
Longer term
Potash supply remains structurally tight into at least 2023, while Mosaic's K3 optimization should add roughly 1 million tons of annual capacity over the next year.
Restarting Colonsay's second mill is expected to lift output to 2 million tons annually by the second half of 2023.
Mosaic Fertilizantes has grown trailing-twelve-month EBITDA to $1.2 billion from less than $70 million pro forma in 2017; management framed mid-cycle EBITDA at $700 million–$800 million, but this remains materially below current peak conditions.
Maaden's low-cost position, supported by roughly $1 per MMBtu natural gas and low sulfur costs, strengthens Mosaic's phosphate supply economics and access to Indian customers.
Brazil expansion is focused on distribution hubs, existing-asset optimization and smaller bolt-ons rather than large greenfield projects, limiting capital intensity.
Red flags
Analysts repeatedly challenged whether Brazil's current margins contain temporary positioning and inventory gains; management declined to provide a detailed margin split and offered only a broad mid-cycle EBITDA framework.
Phosphate operating rates have been depressed by hurricanes, weather events, rail restrictions, sulfur availability and delayed maintenance; Brazil also has lingering equipment failures at Shaw and Tapira.
Demand is being rationed by constrained supply and high prices, and management acknowledged that very high nitrogen costs could crowd out phosphate demand in markets such as India.
Elevated Brazilian channel inventories could delay purchases and pressure near-term volumes and pricing even if underlying farmer demand ultimately recovers.
The $2 billion buyback assumes shares remain more attractive than acquisitions or dividends; a normalization of fertilizer prices could make aggressive repurchases look less compelling in hindsight.
Recommendation history
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.