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CF Industries (CF) Outpaces Stock Market Gains: What You Should Know

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CF Industries (CF - Free Report) closed the most recent trading day at $86.91, moving +0.7% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.4%. Elsewhere, the Dow gained 0.33%, while the tech-heavy Nasdaq lost 1.1%.

Heading into today, shares of the fertilizer maker had lost 8.72% over the past month, lagging the Basic Materials sector's gain of 5.7% and the S&P 500's loss of 0.01% in that time.

CF Industries will be looking to display strength as it nears its next earnings release. On that day, CF Industries is projected to report earnings of $4.09 per share, which would represent year-over-year growth of 10.24%. Meanwhile, our latest consensus estimate is calling for revenue of $2.84 billion, up 11.79% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for CF Industries. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 4.07% lower. CF Industries is currently a Zacks Rank #3 (Hold).

In terms of valuation, CF Industries is currently trading at a Forward P/E ratio of 5.96. Its industry sports an average Forward P/E of 6.09, so we one might conclude that CF Industries is trading at a discount comparatively.

Also, we should mention that CF has a PEG ratio of 0.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Fertilizers was holding an average PEG ratio of 0.78 at yesterday's closing price.

The Fertilizers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 244, which puts it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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