CF Industries
CF
$133.35
-3.24%
CF Industries Holdings, Inc. is a leading global producer and distributor of nitrogen fertilizers, primarily serving the agricultural sector with products such as ammonia, urea, and nitrogen solutions. The company distinguishes itself as one of the lowest-cost nitrogen producers globally, leveraging abundant and inexpensive U.S. natural gas as its primary feedstock, and is strategically investing in low-carbon blue and green ammonia for future energy markets. The current investor narrative centers on the company's significant earnings boost from the recent Strait of Hormuz blockade, which has disrupted global fertilizer supply and elevated nitrogen prices, while also focusing on its long-term growth prospects in the clean ammonia space as an alternative fuel source.…
CF
CF Industries
$133.35
Investment Opinion: Should I buy CF Today?
Based on the data, CF Industries is rated a Hold. The consensus recommendation is 'hold' with an average target price of $125.04, implying a -6.2% downside from the current price. The thesis is that while the company has strong fundamentals and benefits from current supply disruptions, the stock has already priced in much of the upside, and the risk of earnings normalization is high.
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CF 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk/reward profile. While current fundamentals are excellent, the market is pricing in a normalization of earnings, and the stock has limited upside to analyst targets. The key factor is the duration of the Hormuz disruption; if it persists, the stock could rally, but if it resolves, a correction is likely. Upgrades to bullish would require evidence of sustained high nitrogen prices or upward target revisions, while downgrades would occur if geopolitical tensions ease or earnings miss expectations.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CF Industries's 12-month outlook, with a consensus price target around $125.04 and implied upside of -6.2% versus the current price.
Average Target
$125.04
0 analysts
Implied Upside
-6.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$98 - $196
Analyst target range
CF Industries is covered by 19 analysts, with a consensus recommendation of 'hold' and a mean rating of 2.95 (where 1 is strong buy and 5 is sell). The average price target is $125.04, which implies a -6.2% downside from the current price of $133.35, indicating that the stock has surpassed analyst expectations. The distribution of ratings is not provided, but the 'hold' consensus suggests a neutral stance, with recent actions from firms like Morgan Stanley (Equal Weight) and JP Morgan (Neutral) reinforcing this view, while Barclays maintains an Overweight rating. The target price range is wide, from a low of $98.00 to a high of $195.72, reflecting significant uncertainty about the sustainability of current fertilizer prices. The high target of $195.72 assumes that the Hormuz blockade continues to constrain supply, keeping nitrogen prices elevated and driving earnings above current estimates, while the low target of $98.00 prices in a rapid normalization of prices and potential demand destruction. The wide spread between the low and high targets (nearly 100% difference) indicates high uncertainty, but the recent upgrade from Scotiabank (from Sector Perform to Sector Outperform) suggests some analysts see upside potential, while the stock's strong price performance has outpaced the average target, which may lead to upward revisions in the near term.
Bulls vs Bears: CF Investment Factors
CF Industries presents a compelling bull case with accelerating revenue, exceptional margins, and a low trailing PE, all supported by a strong balance sheet and low beta. However, the bear case centers on the sustainability of Hormuz-driven prices, with the forward PE signaling expected earnings decline and the stock trading above analyst targets. The single most important tension is whether the supply disruption is temporary or prolonged; if prices normalize, the stock could correct significantly, but if disruptions persist, earnings and the stock could continue to rise. Currently, the bull case has stronger evidence given the robust financials and momentum, but the risk of reversal is substantial.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue surged 19.4% YoY to $1.986B, with sequential growth from $1.872B in Q4 2025. This acceleration is driven by higher nitrogen prices from the Hormuz blockade, which has stranded a third of global fertilizer supply.
- Exceptional Profitability: Net margin expanded to 30.97% in Q1 2026 from 18.76% a year ago, with net income of $615M. ROE stands at 30.07%, and operating margin is 32.23%, reflecting strong cost control and pricing power.
- Undervalued on Earnings: Trailing PE of 8.61x is well below the industry average and the stock's own historical range (3.83x-25.22x). PEG ratio of 0.26 suggests the market is not fully pricing in near-term earnings growth.
- Low Volatility and Strong Balance Sheet: Beta of 0.399 indicates significantly lower volatility than the market, unusual for a commodity stock. Debt-to-equity is 0.82, current ratio 3.37, and interest coverage 16.41x, providing financial stability.
Bearish
- Earnings Normalization Expected: Forward PE of 12.86x is 49% higher than trailing PE, implying the market expects earnings to decline as Hormuz supply disruptions ease. This is a key overhang on the stock.
- Stock Trades Above Analyst Target: Current price of $133.35 is 6.2% above the average analyst target of $125.04. With a consensus 'hold' rating, the stock has already priced in much of the near-term upside.
- Geopolitical Risk Reversal: Recent news of Hormuz reopening (April 17) caused oil to crash 14%, and fertilizer prices could similarly normalize. The stock's 58.4% 1-year gain is heavily tied to the blockade, which may prove temporary.
- Cyclicality and Demand Destruction: High nitrogen prices risk reducing farmer demand, as seen in the 2022-2023 cycle. The low analyst target of $98 implies a 26.5% downside if prices fall sharply.
CF Technical Analysis
CF Industries is in a robust uptrend, with the stock price surging 58.4% over the past year to $133.35, significantly outperforming the S&P 500's 18.65% gain. The stock is trading at 94% of its 52-week range (between $75.42 low and $141.96 high), indicating strong momentum and investor confidence, though it is approaching overbought territory near its highs. The 1-month price change of +14.26% and 3-month change of +17.50% show accelerating short-term momentum, with the stock recently breaking out to new highs, driven by the geopolitical supply shock. The stock's beta of 0.399 indicates it is significantly less volatile than the broader market, which is unusual for a commodity-linked stock and suggests a defensive quality, but the recent price surge has been accompanied by a -3.24% pullback from the September 2 close of $139.27, hinting at potential short-term consolidation. Key support lies at the 52-week low of $75.42, but more immediate support is around $120, the recent breakout level, while resistance is at the 52-week high of $141.96. A breakout above $141.96 would signal a continuation of the uptrend, while a breakdown below $120 could indicate a reversal, though the stock's low beta and strong relative strength (39.76% vs. S&P 500 over 1 year) suggest it may hold up better than the market in a downturn.
Beta
0.40
0.40x market volatility
Max Drawdown
-25.8%
Largest decline past year
52-Week Range
$75-$142
Price range past year
Annual Return
+58.4%
Cumulative gain past year
| Period | CF Return | S&P 500 |
|---|---|---|
| 1m | +14.3% | -0.4% |
| 3m | +17.5% | +4.2% |
| 6m | +15.2% | +13.7% |
| 1y | +58.4% | +19.0% |
| ytd | +66.4% | +12.9% |
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CF Fundamental Analysis
CF Industries' revenue has shown strong growth, with the most recent quarter (Q1 2026) reporting $1.986 billion, a 19.4% increase year-over-year, up from $1.663 billion in Q1 2025. This growth is accelerating, as the prior four quarters (Q2 2025 through Q4 2025) saw revenues of $1.89 billion, $1.659 billion, $1.872 billion, and $1.986 billion, respectively, indicating a clear upward trajectory. The revenue surge is primarily driven by higher nitrogen fertilizer prices, a result of the Hormuz blockade disrupting global supply, with the Ammonia segment contributing $627 million and Urea $590 million in the latest quarter. The company's profitability is robust, with Q1 2026 net income of $615 million and a net margin of 30.97%, up from 18.76% in Q1 2025, reflecting the benefit of higher prices. Gross margin improved to 37.56% in Q1 2026 from 40.71% in Q1 2025, but the operating margin expanded to 32.23% from 35.66% year-over-year, indicating strong cost control. The company's balance sheet is solid, with a debt-to-equity ratio of 0.82 and a current ratio of 3.37, indicating ample liquidity. Free cash flow for the trailing twelve months is $1.621 billion, and the company generated $496 million in operating cash flow in Q1 2026, which comfortably covers its capital expenditures of $223 million and dividends of $78 million, demonstrating its ability to fund growth internally. Return on equity is an impressive 30.07%, and the company has a strong interest coverage ratio of 16.41, indicating low financial risk.
Quarterly Revenue
$2.0B
2026-03
Revenue YoY Growth
+19.4%
YoY Comparison
Gross Margin
37.6%
Latest Quarter
Free Cash Flow
$1.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CF Overvalued?
Given CF Industries' positive net income, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE is 8.61x, while the forward PE is 12.86x, indicating that the market expects earnings to decline from current elevated levels as the Hormuz supply shock normalizes. The gap between trailing and forward PE suggests a potential earnings contraction, but the PEG ratio of 0.26 implies the stock is undervalued relative to its growth prospects. Compared to the industry average, CF's PE of 8.61x is significantly lower than the sector's typical multiple, reflecting its cyclical nature, but the stock trades at a premium to its own historical average PE of around 10-12x seen in recent quarters. The current valuation is near the lower end of its historical PE range (which has been as low as 3.83x in 2022 and as high as 25.22x in 2023), suggesting that the market is pricing in a normalization of fertilizer prices, but the stock's low multiple and high dividend yield of 2.6% may offer value if nitrogen prices remain elevated longer than expected.
PE
8.6x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 4x~14x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
4.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include the cyclicality of nitrogen prices, which directly impact revenue and margins. Q1 2026 net margin of 30.97% is elevated and likely unsustainable; if prices fall to pre-blockade levels, margins could revert to the 18-20% range seen in 2025. The company's debt-to-equity of 0.82 is manageable, but interest expense of $39M in Q1 could pressure earnings if rates rise. Free cash flow of $1.621B TTM is strong, but capital expenditures of $223M in Q1 indicate ongoing investment needs, and a prolonged downturn could strain liquidity despite a current ratio of 3.37.