Nutrien (TSX:NTR) is down about 10% in 2024. Contrarian investors are wondering if NTR stock is now undervalued and good to buy for a self-directed portfolio focused on dividends and total returns.

Nutrien share price

Nutrien trades for close to $68 on the TSX at the time of writing. The stock is above the 12-month low of around $61 but is way off the $140 it hit in early 2022 when war broke out between Russia and Ukraine.

Nutrien is a major player in the global crop nutrients sector.

The stock initially surged in 2022 due to concerns that Russian and Belarus producers of potash would see their ability to supply global markets severely restricted. Potash prices spiked to US$1,200 per tonne when the war broke out but declined through the rest of 2022 and continued to slide in 2023. Through most of 2025, the price has been close to US$300. Investors are hoping a bottom is forming and that the next upward leg in the commodity cycle could be on the way next year.

Nutrien earnings

Nutrien reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$1.01 billion in the third quarter (Q3) of 2024 compared to $1.08 billion in the same period last year. For the first nine months of 2024, adjusted EBITDA came in at US$4.30 billion compared to US$4.98 billion in 2023.

Weak prices for the commodities have largely been the story in 2024. Retail results slipped in Q3, but the division delivered a 10% gain in adjusted EBITDA for the first nine months of the year.

Potash sales hit record volumes in the first three quarters of 2024, but the lower prices resulted in a 20% drop in adjusted EBITDA to US$1.56 billion, although the decline in Q3 was just 9%.

Nitrogen adjusted EBITDA slipped 8% for the first nine months of the year, but there was a 21% increase for Q3 due to better pricing, so things could be turning the corner in the nitrogen market.

Phosphate-adjusted EBITDA fell 12% in the first three quarters of the year. The Q3 results came in essentially flat compared to Q3 2023.

Outlook

Weather, currency markets, and crop prices all impact demand for Nutrien's products. As climate change leads to more severe weather conditions, the coming years will likely see more volatility. Longer and more severe droughts will combine with larger and more frequent storms to impact the global agriculture industry.

In the Q3 report, Nutrien said favourable growing conditions in the U.S. this year should put farmers in a good financial position heading into 2025. That tends to support solid fertilizer, seed, and crop protection demand for the next planting season.

On the wholesale side, Nutrien raised its 2024 global potash shipments forecast to 70-72 million tonnes, driven by better demand in Brazil and Southeast Asia. Nutrien expects 2025 global potash shipments to be 71-74 million tonnes. Limited new capacity is expected to come online, so prices could drift higher in 2025 on demand growth.

Phosphate and nitrogen could also see improved prices, driven by project delays and supply outages. Nitrogen inventory in the U.S. was estimated to be below average levels in Q3, according to Nutrien, so there could be a demand boost in the first part of the year.

Over the long run, rising populations will boost demand for food. At the same time, urban sprawl will continue to consume farmland. In addition, the expansion of the middle class in heavily populated emerging markets will increase demand for meat, leading to rising demand for animal feed.

As such, the big picture should be positive for Nutrien.

Should you buy now?

The market appears to be stabilizing ahead of 2025. Contrarian investors might want to start nibbling on Nutrien at the current level. You can pick up a decent 4.4% dividend yield today while you wait for the rebound.