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CF (CF) Soars 6.5%: Is Further Upside Left in the Stock?

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CF Industries (CF - Free Report) shares ended the last trading session 6.5% higher at $99.93. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.8% gain over the past four weeks.

CF shares jumped following the Environmental Protection Agency's new proposal to boost biofuel blending mandates, expected to benefit biomass-based diesel production. Being among the largest ammonia producers globally, CF will benefit from this initiative.

This fertilizer maker is expected to post quarterly earnings of $2.16 per share in its upcoming report, which represents a year-over-year change of -6.1%. Revenues are expected to be $1.7 billion, up 8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For CF, the consensus EPS estimate for the quarter has been revised 3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CF going forward to see if this recent jump can turn into more strength down the road.

 

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

CF is part of the Zacks Fertilizers industry. Nutrien (NTR - Free Report) , another stock in the same industry, closed the last trading session 4.1% higher at $62.89. NTR has returned 5.2% in the past month.

Nutrien's consensus EPS estimate for the upcoming report has changed -0.5% over the past month to $2.41. Compared to the company's year-ago EPS, this represents a change of +3%. Nutrien currently boasts a Zacks Rank of #3 (Hold).


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