CMP Should I Buy
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Compass Minerals International Inc (CMP) is not a strong buy at the moment given the investor's long-term strategy and beginner level. Despite some positive catalysts such as hedge fund buying and increased revenue, the stock's recent price decline, weak technical indicators, and declining net income and EPS suggest caution. Holding the stock or waiting for a better entry point is recommended.
The MACD is negative and expanding (-0.282), indicating bearish momentum. RSI is neutral at 41.552, and moving averages are converging, showing no clear trend. The stock is trading below the pivot level (22.958), with key support at 21.288 and resistance at 24.629. Overall, the technical indicators suggest a bearish to neutral trend.
Winter snow days are trending 50%+ above historical averages, which could support the de-icing salt business.
The stock price dropped 4.23% in the regular market and 1.82% in pre-market trading. Net income and EPS declined significantly (-178.81% and -177.19% YoY, respectively). Analysts have mixed ratings, with JPMorgan maintaining an Underweight rating and setting a price target below the current price ($20).
In Q1 2026, revenue increased by 28.94% YoY to $396.1M, but net income dropped significantly by -178.81% YoY to $18.6M. EPS also fell by -177.19% YoY to 0.44. Gross margin improved by 42.88% YoY to 15.96%. While revenue growth is promising, the sharp decline in profitability is concerning.
Analysts have mixed views. JPMorgan raised the price target to $20 (Underweight), BMO Capital raised it to $25 (Market Perform), and Deutsche Bank lowered it to $21 (Buy). Freedom Capital initiated coverage with a Buy rating and a $22 price target. The consensus reflects cautious optimism but no strong bullish sentiment.
