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CF Industries Holdings, Inc.’s (CF - Free Report) shares have shot up 57.9% over the past six months. The company has outperformed its industry’s rise of 44.5% over the same time frame. It has also topped the S&P 500’s roughly 12.1% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
What’s Going in CF’s Favor?
CF Industries is gaining from higher nitrogen fertilizer demand in major markets. 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. In 2022, demand for nitrogen is expected to be driven by favorable industrial and economic activities and high levels of corn planted acres in the United States. Demand for urea imports from Brazil and India is also expected to be strong this year. Higher crop prices, high levels of planted corn acres and improved farm economics are likely to increase demand in Brazil.
The company, on its first-quarter call, said that it sees strong global nitrogen industry dynamics for the foreseeable future with robust global nitrogen demand along with tight nitrogen supply worldwide and wide energy differentials between North America and marginal production in Europe and Asia.
The company is also benefiting from higher nitrogen prices on the back of lower supply resulting from reduced operating rates across Europe and Asia 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 in Europe and Asia along with export restrictions across certain countries.
CF Industries also remains committed to boosting shareholders’ value by leveraging strong cash flows. It generated cash flow from operations of $1,391 million in the first quarter, up around 141% year over year. The company repurchased around 1.3 million shares for $100 million during the quarter. Its board also raised its quarterly dividend by 33% to 40 cents per share.
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Allegheny Technologies Inc. (ATI - Free Report) and Cabot Corporation (CBT - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 163.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 27.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied roughly 38% in a year.
Allegheny has a projected earnings growth rate of 953.9% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 31.7% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 16% in a year and currently sports a Zacks Rank #1.
Cabot, currently sporting a Zacks Rank #2 (Buy), has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 24% over a year.
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CF Industries (CF) Stock Rallies 58% in 6 Months: Here's Why
CF Industries Holdings, Inc.’s (CF - Free Report) shares have shot up 57.9% over the past six months. The company has outperformed its industry’s rise of 44.5% over the same time frame. It has also topped the S&P 500’s roughly 12.1% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
What’s Going in CF’s Favor?
CF Industries is gaining from higher nitrogen fertilizer demand in major markets. 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. In 2022, demand for nitrogen is expected to be driven by favorable industrial and economic activities and high levels of corn planted acres in the United States. Demand for urea imports from Brazil and India is also expected to be strong this year. Higher crop prices, high levels of planted corn acres and improved farm economics are likely to increase demand in Brazil.
The company, on its first-quarter call, said that it sees strong global nitrogen industry dynamics for the foreseeable future with robust global nitrogen demand along with tight nitrogen supply worldwide and wide energy differentials between North America and marginal production in Europe and Asia.
The company is also benefiting from higher nitrogen prices on the back of lower supply resulting from reduced operating rates across Europe and Asia 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 in Europe and Asia along with export restrictions across certain countries.
CF Industries also remains committed to boosting shareholders’ value by leveraging strong cash flows. It generated cash flow from operations of $1,391 million in the first quarter, up around 141% year over year. The company repurchased around 1.3 million shares for $100 million during the quarter. Its board also raised its quarterly dividend by 33% to 40 cents per share.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Allegheny Technologies Inc. (ATI - Free Report) and Cabot Corporation (CBT - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 163.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 27.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied roughly 38% in a year.
Allegheny has a projected earnings growth rate of 953.9% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 31.7% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 16% in a year and currently sports a Zacks Rank #1.
Cabot, currently sporting a Zacks Rank #2 (Buy), has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 24% over a year.