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CF Industries (CF) Stock Up 34% in 6 months: What's Driving It?

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Shares of CF Industries Holdings, Inc. (CF - Free Report) have rallied 33.5% in the past six months compared with the industry’s 24.3% rise and the S&P 500’s 15.4% gain.

The company has a market cap of around $11.4 billion.

Let’s discuss the factors driving this Zacks Rank #1 (Strong Buy) stock.

Positive outlook, strong demand of nitrogen fertilizer and higher nitrogen prices are major factors contributing to the company’s price performance.

The company’s earnings of 70 cents per share for the first-quarter 2021 topped the Zacks Consensus Estimate of 57 cents per share.

The company projects around 90-92 million planted corn acres in the United States in 2021. It also expects higher canola plantings in Canada to support nitrogen demand.

Moreover, CF Industries projects higher nitrogen demand in North America for industrial uses. The company anticipates nitrogen requirements in other regions to remain strong this year, which is likely to be driven by strong demand for urea imports from India and Brazil.

CF Industries is likely to benefit from higher nitrogen fertilizer demand in major markets. Global nitrogen demand is expected to remain strong this year. Strong crop commodity prices are contributing to higher demand globally. Industrial demand has also recovered from the pandemic-related disruptions.

CF Industries is also benefiting from higher nitrogen prices. CF Industries expects nitrogen pricing to be positive in 2021 as global nitrogen supply and demand balance has been significantly tightened by low global coarse grains stocks-to-use ratios as well as higher energy prices in Asia and Europe. As such, higher nitrogen prices are expected to drive the company’s sales and bottom line.

Earnings estimate revisions have the greatest impact on stock prices. In the past two months, the Zacks Consensus Estimate for CF Industries for the current year has increased 46.7%. The consensus estimate for 2022 has also been revised 53.7% upward over the same time frame.

CF Industries Holdings, Inc. Price and Consensus

 

CF Industries Holdings, Inc. Price and Consensus

CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote

 

Other Stocks to Consider

Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Nucor Corporation (NUE - Free Report) and Cabot Corporation (CBT - Free Report) .

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 73.2% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 229.3% for the current year. The company’s shares have gained 132.2% in the past year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of around 126% for the current fiscal. The company’s shares have surged 64.3% in the past year. It currently flaunts a Zacks Rank #1.

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Nucor Corporation (NUE) - free report >>

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Dow Inc. (DOW) - free report >>

Cabot Corporation (CBT) - free report >>