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CF Industries (CF) Shares Up 11% in 3 Months: Here's Why
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CF Industries Holdings, Inc.’s (CF - Free Report) shares have gained 11% over the past three months. The company has outperformed its industry’s rise of 4.9% over the same time frame. It has also topped the S&P 500’s roughly 3.1% decline over the same period.
Let’s take a look into the factors that are driving this fertilizer maker.
Image Source: Zacks Investment Research
What’s Aiding CF?
Forecast-topping earnings performance in the second quarter of 2022 and upbeat prospects have contributed to the rally in the company's shares. CF Industries, a Zacks Rank #3 (Hold) stock, logged adjusted earnings per share of $6.19 in the second quarter, topping the Zacks Consensus Estimate of $6.06. The company benefited from higher average selling prices across all segments on reduced global supply availability and strong demand.
CF Industries is benefiting from strong nitrogen fertilizer demand. Global demand for nitrogen is expected to remain strong through the balance of 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.
Better-ranked stocks worth considering in the basic materials space include Daqo New Energy Corp. (DQ - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and The Chemours Company (CC - Free Report) .
Daqo New Energy, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 177.5% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current fiscal has been revised 20.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 6% over a year.
Sociedad has a projected earnings growth rate of 520.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 34% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 95% in a year. The company carries a Zacks Rank #2 (Buy).
Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 7.3% upward in the past 60 days.
Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 3% in a year and currently carries a Zacks Rank #2.
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CF Industries (CF) Shares Up 11% in 3 Months: Here's Why
CF Industries Holdings, Inc.’s (CF - Free Report) shares have gained 11% over the past three months. The company has outperformed its industry’s rise of 4.9% over the same time frame. It has also topped the S&P 500’s roughly 3.1% decline over the same period.
Let’s take a look into the factors that are driving this fertilizer maker.
Image Source: Zacks Investment Research
What’s Aiding CF?
Forecast-topping earnings performance in the second quarter of 2022 and upbeat prospects have contributed to the rally in the company's shares. CF Industries, a Zacks Rank #3 (Hold) stock, logged adjusted earnings per share of $6.19 in the second quarter, topping the Zacks Consensus Estimate of $6.06. The company benefited from higher average selling prices across all segments on reduced global supply availability and strong demand.
CF Industries is benefiting from strong nitrogen fertilizer demand. Global demand for nitrogen is expected to remain strong through the balance of 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
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Daqo New Energy Corp. (DQ - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and The Chemours Company (CC - Free Report) .
Daqo New Energy, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 177.5% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current fiscal has been revised 20.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 6% over a year.
Sociedad has a projected earnings growth rate of 520.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 34% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 95% in a year. The company carries a Zacks Rank #2 (Buy).
Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 7.3% upward in the past 60 days.
Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 3% in a year and currently carries a Zacks Rank #2.