Headquartered in Northbrook, Illinois, CF Industries Holdings, Inc. (CF) is a global manufacturer and distributor of agricultural fertilizers with a market cap of $14.3 billion. Specializing in nitrogen-based products, CF Industries plays a critical role in enhancing crop yields and supporting food production worldwide.
Companies valued at $10 billion or more are typically classified as "large-cap stocks," and CF Industries is a prime example of this. The company operates an extensive network of production and distribution facilities, serving a diverse customer base that includes farmers, cooperatives, and industrial consumers, ensuring reliable supply and innovative solutions for agricultural needs.
It benefits from its cost leadership, leveraging low-cost U.S. natural gas to remain one of the world’s most efficient nitrogen producers. Additionally, CF is strategically investing in blue and green ammonia, aligning with the clean energy transition and expanding into low-carbon hydrogen and nitrogen markets, setting the stage for future growth.
CF shares are trading 3.2% below their 52-week high of $87.82, which they hit on Oct. 10, 2023. The stock has gained 11.5% over the past three months, outperforming the broader Nasdaq Composite ($NASX), which has surged 2.2% over the same time frame.
In the longer term, CF is up 6.9% on a YTD basis but slumped marginally over the past 52 weeks. In comparison, the Nasdaq has gained 21.2% in 2024 and rallied 39.2% over the past year.
Despite its grim price performance over the past year, CF has been trading above its 50-day and 200-day moving average since early September, suggesting an uptrend.
On Aug. 7, CF Industries reported its Q2 earnings results, delivering an adjusted EPS of $2.30, surpassing analysts' expectations of $1.80. However, revenue came in at $1.57 billion, slightly missing Wall Street's estimate of $1.58 billion. Despite the revenue miss, CF shares rose 8.5% in the following trading session.
Although global crop prices have eased due to improved supply, U.S. corn and soybean production is projected to stay high this year, thanks to favorable weather conditions. This bodes well for fertilizer producers like CF Industries.
Highlighting the contrast in performance, CF's competitor, The Mosaic Company (MOS), has underperformed both the CF and the broader index, falling 25.8% on a YTD basis and 25.1% over the past year.
Analysts are reasonably bullish about CF's prospects despite its recent underperformance. The stock has a consensus rating of "Moderate Buy" from 14 analysts in coverage, and it currently trades above its mean price target of $84.50.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
