Northbrook, Illinois-based CF Industries Holdings, Inc. (CF) focuses on producing and selling ammonia and ammonia-derived fertilizers which provide energy to crops and increase yields. Valued at $14.8 billion by market cap, CF Industries operates nine worldscale manufacturing complexes in North America and internationally.
Companies worth $10 billion or more are generally described as “large-cap stocks,” CF Industries fits this bill perfectly. Given its decades-long history and extensive business, CF’s valuation above this mark is unsurprising. Its manufacturing complexes are among the most cost-advantaged, efficient, and flexible in the world and the company has an unparalleled storage, transportation, and distribution network in North America.
The stock recently touched its two-year high of $94.46 on Dec. 4 and is now trading 10% below that peak. CF stock has gained 5.5% over the past three months, outperforming the Dow Jones Industrials Average’s ($DOWI) 1.9% gains during the same time frame.
However, over the longer-term, CF has underperformed the Dow. CF stock has gained 6.9% on a YTD basis and 9.3% over the past 52 weeks, compared to DOWI’s 13.7% surge in 2024 and 15.5% returns over the past year.
To confirm the overall bullish trend and the recent downturn, CF has traded mostly above its 200-day and 50-day moving averages since early August with slight fluctuations before falling below its 50-day moving average in the past week.
CF Industries stock observed marginal gains and maintained a positive momentum for the next three trading sessions after the release of its impressive Q3 earnings on Oct. 30. Driven by the favorable market conditions, CF observed notable pricing gains and topline growth in its UAN and Ammonia segments along with margin expansion. Its total net sales surged 7.6% year-over-year to $1.4 billion, exceeding Wall Street’s expectations. Meanwhile, its gross margin expanded 279 basis points compared to the year-ago quarter to 32.4%, resulting in a 17.8% growth in gross profits to $444 million.
The company also reduced its operating and non-operating expenses which led to a massive 68.3% year-over-year growth in net earnings to shareholders, reaching $276 million and its EPS of $1.55 surpassed analysts’ estimates by a staggering 47.6%.
CF Industries has substantially outpaced its peer The Mosaic Company’s (MOS) 32.6% decline in 2024 and 33.1% drop over the past 52 weeks.
Among the 15 analysts covering the CF stock, the consensus rating is a “Moderate Buy.” Its mean price target of $89.91 represents a 5.8% premium to current price levels.
