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Here's Why You Should Invest in CF Industries (CF) Stock Now
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CF Industries Holdings, Inc.’s (CF - Free Report) shares have risen roughly 25% over the past three months. It is well-placed to benefit from the rising nitrogen fertilizer demand in major markets and higher nitrogen prices.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Let's see what makes this this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
An Outperformer
Shares of CF Industries have popped 74.9% over a year compared with the 26.2% rise of its industry. It has also outperformed the S&P 500’s roughly 17.1% decline over the same period.
Image Source: Zacks Investment Research
Estimates Northbound
Over the past month, the Zacks Consensus Estimate for CF Industries for 2022 has increased around 0.7%. The consensus estimate for third-quarter 2022 has also been revised 1.4% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Solid Growth Prospects
The Zacks Consensus Estimate for earnings for the current year for CF Industries is currently pegged at $19.31, reflecting an expected year-over-year growth of 355.4%. Moreover, earnings are expected to register 267.7% growth in the third quarter.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for CF Industries is 49.1%, above the industry’s level of 31.6%.
Growth Drivers in Place
CF Industries is gaining from strong nitrogen fertilizer demand. Global demand for nitrogen is expected to remain strong in 2022. Higher crop commodity prices are contributing to healthy demand globally. Industrial demand has also recovered from the pandemic-related disruptions.
The company, on its second-quarter call, said that it sees the global nitrogen supply-demand balance to remain tight for the foreseeable future, supported by resilient agricultural-led demand and uncertainty about global production and export supply availability. Energy spreads between low-cost producers and marginal production in Europe and Asia also expected to remain historically wide.
CF Industries expects nitrogen demand for industrial use in North America to be supported by mining activity. It also envisions India to tender on a regular basis into 2023 as higher domestic production is unlikely to fully meet increased demand as growers boost grain production. The company also envisions urea consumption in Brazil to remain strong this year, backed by high crop prices, expected high planted corn acres and improved farm incomes.
The company is also benefiting from higher nitrogen prices on the back of lower supply resulting from reduced operating rates globally due to higher energy prices. Higher nitrogen prices are driving its sales as witnessed in the last-reported quarter. The positive pricing environment is expected to continue moving ahead. Global nitrogen supply is expected to remain challenged due to higher energy prices and geopolitical factors.
Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Ryerson Holding Corporation (RYI - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 22.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 30% in a year.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 31% over a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 74% in a year. The company currently carries a Zacks Rank #2.
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Here's Why You Should Invest in CF Industries (CF) Stock Now
CF Industries Holdings, Inc.’s (CF - Free Report) shares have risen roughly 25% over the past three months. It is well-placed to benefit from the rising nitrogen fertilizer demand in major markets and higher nitrogen prices.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Let's see what makes this this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
An Outperformer
Shares of CF Industries have popped 74.9% over a year compared with the 26.2% rise of its industry. It has also outperformed the S&P 500’s roughly 17.1% decline over the same period.
Image Source: Zacks Investment Research
Estimates Northbound
Over the past month, the Zacks Consensus Estimate for CF Industries for 2022 has increased around 0.7%. The consensus estimate for third-quarter 2022 has also been revised 1.4% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Solid Growth Prospects
The Zacks Consensus Estimate for earnings for the current year for CF Industries is currently pegged at $19.31, reflecting an expected year-over-year growth of 355.4%. Moreover, earnings are expected to register 267.7% growth in the third quarter.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for CF Industries is 49.1%, above the industry’s level of 31.6%.
Growth Drivers in Place
CF Industries is gaining from strong nitrogen fertilizer demand. Global demand for nitrogen is expected to remain strong in 2022. Higher crop commodity prices are contributing to healthy demand globally. Industrial demand has also recovered from the pandemic-related disruptions.
The company, on its second-quarter call, said that it sees the global nitrogen supply-demand balance to remain tight for the foreseeable future, supported by resilient agricultural-led demand and uncertainty about global production and export supply availability. Energy spreads between low-cost producers and marginal production in Europe and Asia also expected to remain historically wide.
CF Industries expects nitrogen demand for industrial use in North America to be supported by mining activity. It also envisions India to tender on a regular basis into 2023 as higher domestic production is unlikely to fully meet increased demand as growers boost grain production. The company also envisions urea consumption in Brazil to remain strong this year, backed by high crop prices, expected high planted corn acres and improved farm incomes.
The company is also benefiting from higher nitrogen prices on the back of lower supply resulting from reduced operating rates globally due to higher energy prices. Higher nitrogen prices are driving its sales as witnessed in the last-reported quarter. The positive pricing environment is expected to continue moving ahead. Global nitrogen supply is expected to remain challenged due to higher energy prices and geopolitical factors.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Ryerson Holding Corporation (RYI - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 22.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 30% in a year.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 31% over a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 74% in a year. The company currently carries a Zacks Rank #2.