Compass Minerals: Leadership Change Will Likely Shift Focus on Cost Reductions

Compass Minerals announced a leadership change. Incoming CEO Edward Dowling will replace current CEO Kevin Crutchfield effective Jan. 18. In the news release, board chair Joe Reece's statement pointed to Compass entering its next chapter, where the company will renew focus on reducing costs and driving free cash flow generation. We interpret this to mean Compass is likely not going to pursue new business lines. Instead, we expect Compass to reduce unit production costs at its salt and specialty potash businesses. This is in line with our current forecast. Accordingly, we maintain our $45 fair value estimate for Compass Minerals. Our wide moat rating is also unchanged.