Incitec Pivot has made a decision to sell their fertiliser unit, which sparked doubts from global financial services firm, Morgan Stanley.

The firm relayed skepticism towards the reported potential deal with an Indonesian urea and ammonia producer worth A$1.5 billion.

Morgan Stanley appraised the business at a far conservative A$900 million, arguing that any deal valued as reported by the media would be in best interest to shareholders.

However, the firm also identifies possible hurdles stemming from additional expenses provoked by supply issues, and their subsequent impact to profits.

Morgan Stanley’s concerns emanate from the long-standing inefficient positioning of the plant on the cost curve and the prospect of rising gas costs rendering it financially unfeasible at long-run fertiliser and currency prices.

Additionally, among 11 analysts, five rate it ‘buy’ or higher and six rate it ‘hold’, with a median PT at A$3.32, according to Refinitiv data.

Currently, Incitec Pivot shares are down 0.7% trading at A$3.040.

Incitec Pivot is an Australian multinational corporation that manufactures fertiliser, explosives and chemicals.