Nutrien (TSX:NTR), which was once a top performer in Canada's agricultural sector, has faced big challenges over the last two years. Despite a broader market rally, Nutrien stock has continued to decline, falling 24.5% in 2023 and extending its losses with a further 13% drop so far in 2024. Now trading at $64.85 per share, with a market cap of $32.3 billion, the Saskatoon-headquartered company has underperformed the TSX Composite, which has risen over 17% year to date. NTR stock offers a 4.6% annualized dividend yield at the current market price.

As we look ahead to 2025, many investors may wonder whether Nutrien stock could stage a recovery or if its challenges will continue. In this article, let's explore the key fundamental factors affecting Nutrien's stock of late, its growth prospects, and what the future might hold for this Canadian agriculture giant in 2025.

Key reasons for Nutrien stock's dismal performance

NTR stock's struggles in recent years mainly started due to a combination of external market conditions and its internal operational challenges. One of the primary reasons for Nutrien's dismal performance has been the ongoing volatility in global fertilizer markets, which has affected its revenue streams.

In the most recent quarter ended in September 2024, the Canadian crop inputs and services firm registered a 5.3% YoY (year-over-year) drop in its total revenue to US$5.1 billion as potash and nitrogen prices remained under pressure, with global benchmark prices experiencing declines.

Despite the company reporting record potash sales volumes of over 11 million tonnes in the first three quarters of 2024 combined, lower prices also created headwinds for Nutrien's profitability. For example, the average net selling price of potash fell to $220 per tonne during the first nine months of 2024 compared to $301 in the same period of 2023. While Nutrien tried to optimize its production costs by focusing on advancements in mine automation, it wasn't enough to offset the impact of declining prices.

NTR stock's 2025 outlook

Although many factors, such as lower prices and volatility in global fertilizer markets, have made investors worried about Nutrien's ability to navigate a challenging macroeconomic environment in the last two years, brighter days may be ahead in 2025 and beyond.

Notably, the U.S. market accounted for nearly 61% of Nutrien's total revenue in 2023, making it a key region for the company's future growth. As easing inflationary pressures encourage the U.S. Federal Reserve and the Bank of Canada to continue slashing interest rates, agricultural markets could see a rebound, which could lead to stabilized fertilizer demand and prices. If the U.S. agricultural sector experiences a recovery, NTR could see major improvements in its 2025 top line.

Meanwhile, Nutrien is accelerating its cost-saving measures, targeting $200 million in annual savings by 2025 while maintaining a focus on high-return growth opportunities in its retail segment. These strategic initiatives also boost the chances of a turnaround for the company in 2025.

In addition, global potash shipments are forecasted to rise, supported by stronger demand in many key markets like Brazil and Southeast Asia. If Nutrien continues optimizing its operations and benefits from expected demand and price trends, it could restore investors' confidence and help its share prices recover in the coming years.