Mosaic (MOS) will likely generate higher free cash flow in 2027 as phosphate margins and operations improve, RBC Capital Markets analysts said in a Wednesday note.

Analysts said that depressed phosphate margins because of the closure of the Strait of Hormuz and restricted sulphur supply are unsustainable.

RBC said that phosphate prices are near record highs, negatively impacting demand, but margins are near record lows due to high sulphur costs.

Analysts said that a reopening of the Strait of Hormuz will improve phosphate margins as sulphur prices decline faster than phosphate prices. Alternatively, if the Strait remains closed, reduced phosphate applications will hurt crop yields, leading to higher crop prices that support higher phosphate prices, the firm said.

RBC said that while 2026 is expected to remain volatile and uncertain due to the war in Iran, phosphate margins will eventually recover.

Analysts upgraded the stock's rating to outperform from sector perform and lowered its price target to $27 from $28.

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