CF Industries
CF
$127.70
-4.57%
CF Industries Holdings, Inc. is a leading North American producer and distributor of nitrogen products, primarily ammonia, urea, UAN, and ammonium nitrate, which are used as fertilizers and in industrial applications; the company operates nitrogen manufacturing facilities across the United States, Canada, and the United Kingdom, and holds a joint-venture interest in a Trinidad and Tobago production facility. CF is one of the world's lowest-cost nitrogen producers, benefiting from cheap US natural gas feedstock, and it is also investing in blue and green ammonia to position itself for the emerging clean-energy and hydrogen economy. The current investor narrative is dominated by the geopolitical supply shock caused by the Strait of Hormuz blockade, which stranded roughly a third of global fertilizer supply and created a massive margin opportunity for North American producers with local inputs, as highlighted in recent news coverage. This tailwind has driven CF shares up sharply year-to-date, but the stock's low beta and defensive characteristics, combined with a consensus 'hold' rating, suggest the market is debating whether the geopolitical premium is sustainable or already priced in.…
CF
CF Industries
$127.70
Investment Opinion: Should I buy CF Today?
Based on the synthesis of analyst consensus, valuation, and growth prospects, CF Industries warrants a 'Hold' rating. The consensus recommendation is 'hold' with a mean of 3.05, and the average target price of $124.72 implies a -6.3% downside from the current price of $133.07. The core thesis is that CF is a low-cost producer benefiting from a temporary supply shock, but the market has already priced in much of the upside, and the risk/reward is balanced at current levels.
The supporting evidence for a Hold includes: 1) The trailing PE of 8.61x is below the industry average of 15-20x, but the forward PE of 12.45x suggests earnings are expected to decline; 2) Revenue grew 19.4% year-over-year in Q1 2026, but this growth is driven by elevated prices that may not persist; 3) Profitability is excellent with a net margin of 30.97% and EBITDA margin of 55.9%, but these are likely peak levels; 4) Free cash flow yield is attractive at 12.9%, supporting dividends and buybacks; 5) The implied downside to the average analyst target is -6.3%, indicating limited upside. Compared to the industry, CF's EV/EBITDA of 4.41x is roughly half the typical 8-10x range, but this discount is justified by the cyclical nature of the business and the temporary nature of current earnings.
The biggest risks that could invalidate the Hold rating include: 1) A faster-than-expected normalization of nitrogen prices if the Strait of Hormuz reopens and supply returns, which could compress margins and earnings; 2) A global recession reducing agricultural demand and fertilizer prices; 3) CF's investments in blue and green ammonia not yielding expected returns. The rating would upgrade to Buy if the trailing PE falls below 8x while earnings remain stable, or if nitrogen prices show sustained strength beyond current expectations. It would downgrade to Sell if revenue growth turns negative or if the forward PE exceeds 15x without a corresponding increase in earnings. Relative to its history and peers, CF appears fairly valued to slightly undervalued on trailing metrics, but the market is pricing in a significant earnings decline, making the stock a hold for now.
Sign up to view all
CF 12-Month Price Forecast
CF Industries presents a balanced risk/reward profile at current levels. The company is a low-cost nitrogen producer benefiting from a temporary geopolitical supply shock that has driven exceptional margins and cash flow. However, the market appears to have priced in much of this benefit, as evidenced by the forward PE exceeding the trailing PE and the analyst consensus target implying downside. The stock's low beta and defensive characteristics make it suitable for risk-averse investors, but the cyclical nature of the business and the potential for earnings normalization limit upside. I would upgrade to bullish if nitrogen prices show sustained strength beyond 2026 or if the company demonstrates progress in its blue/green ammonia initiatives. I would downgrade to bearish if the Strait of Hormuz fully reopens and nitrogen prices collapse, or if global agricultural demand weakens significantly.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CF Industries's 12-month outlook, with a consensus price target around $125.25 and implied upside of -1.9% versus the current price.
Average Target
$125.25
0 analysts
Implied Upside
-1.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$98 - $196
Analyst target range
There are 19 analysts covering CF Industries, with a consensus recommendation of 'hold' (recommendation mean of 3.05, where 1 is strong buy and 5 is strong sell). The average target price is $124.72, which implies a downside of approximately -6.3% from the current price of $133.07. This suggests that the consensus view is slightly bearish, as the stock is trading above the average target. The estimated EPS average for the next fiscal year is $7.93, with a low estimate of $7.14 and a high estimate of $10.92, and estimated revenue average of $6.6 billion. The consensus leaning neutral to bearish is notable given the stock's strong year-to-date performance, indicating that analysts believe the current price already reflects the positive catalysts. The target price range is wide, from a low of $98.00 to a high of $195.72, representing a spread of nearly 100%. The high target of $195.72 assumes that the geopolitical supply disruption persists, allowing CF to sustain its elevated margins and potentially expand multiples as the market recognizes the durability of its cost advantage. The low target of $98.00 prices in a normalization of nitrogen prices, margin compression, and a return to mid-cycle earnings, which would result in a significant earnings decline. The wide spread signals high uncertainty about the duration of the supply shock and its impact on CF's earnings. Institutional ratings show a mix of neutral and positive actions: Scotiabank upgraded to 'Sector Outperform' on June 30, 2026, while Barclays maintained 'Overweight' in April 2026, and Morgan Stanley, JP Morgan, CIBC, and Goldman Sachs have 'Neutral' or 'Equal Weight' ratings. The lack of strong buy ratings and the recent upgrade by Scotiabank suggest that analysts are becoming more constructive but remain cautious about chasing the stock at current levels.
Drowning in data?
Find the real signal!
Bulls vs Bears: CF Investment Factors
The bull case for CF rests on its position as a low-cost nitrogen producer benefiting from a temporary geopolitical supply shock that has driven exceptional margins and cash flow. The bear case centers on the sustainability of these elevated earnings, as the forward PE higher than trailing PE and analyst targets implying downside suggest the market expects normalization. Currently, the bear evidence appears slightly stronger because the consensus rating is 'hold' with a target below the current price, and the geopolitical premium may be unwinding as the Strait of Hormuz reopens. The single most important tension is whether the supply disruption persists long enough to justify current earnings, or whether nitrogen prices revert to mid-cycle levels, which would significantly reduce CF's profitability and stock price.
Bullish
- Geopolitical supply shock boosts margins: The Strait of Hormuz blockade has stranded roughly a third of global fertilizer supply, creating a massive margin opportunity for North American producers with local inputs. This is directly reflected in CF's Q1 2026 net margin of 30.97% and EBITDA margin of 55.9%, both well above historical norms.
- Strong revenue and earnings growth: Q1 2026 revenue grew 19.4% year-over-year to $1.986 billion, with net income of $615 million. This continues a multi-quarter trend of double-digit revenue growth, driven by favorable pricing and broad-based demand across ammonia, UAN, and urea segments.
- Attractive free cash flow and shareholder returns: Trailing twelve-month free cash flow is $1.621 billion, yielding approximately 12.9% based on the current market cap of $12.54 billion. The company also repurchased $28 million of stock in Q1 2026 and pays a dividend with a 2.6% yield, supported by a low payout ratio of 22.4%.
- Low-cost producer with competitive moat: CF benefits from cheap US natural gas feedstock, making it one of the world's lowest-cost nitrogen producers. This cost advantage is a durable competitive moat that allows CF to generate strong margins even when nitrogen prices normalize.
Bearish
- Analyst consensus implies downside: The average analyst target price is $124.72, which implies a -6.3% downside from the current price of $133.07. With a consensus recommendation of 'hold' (mean 3.05) and no strong buy ratings, analysts are cautious about chasing the stock at current levels.
- Forward PE higher than trailing PE signals earnings decline: The forward PE of 12.45x is higher than the trailing PE of 8.61x, which is unusual and implies that the market expects earnings to decline from current elevated levels. This suggests that analysts are pricing in a normalization of nitrogen prices as the geopolitical supply shock fades.
- Geopolitical premium may unwind: Recent news indicates that the Strait of Hormuz has reopened, with oil prices plunging and a broad market rally on de-escalation hopes. If the supply disruption fully reverses, nitrogen prices could fall sharply, compressing CF's margins and earnings.
- Technical overextension and momentum divergence: The stock is trading at 133.07, about 88% of its 52-week range, and is up 66.1% year-to-date. However, the 6-month relative strength versus SPY is -12.7%, indicating underperformance over that period and a potential loss of momentum.
CF Technical Analysis
CF Industries is in a sustained uptrend, with the stock up 54.5% over the past year and 66.1% year-to-date, and it is currently trading at 133.07, which is approximately 88% of its 52-week range (52-week low of 75.42 and high of 141.96). This positioning near the upper end of the range signals strong momentum but also raises the risk of overextension, especially given the stock's low beta of 0.399, which implies it typically moves less than 40% as much as the broader market. The current price is only about 6.7% below its 52-week high, suggesting that a breakout to new highs could be imminent if the geopolitical supply shock persists. Recent momentum has been positive but decelerating: the stock is up 10.9% over the past month and 21.5% over the past three months, yet the 6-month change is only 2.7%, indicating that most of the gains occurred in the first quarter and that the stock has been consolidating since. The 1-month relative strength versus SPY is +11.9%, while the 6-month relative strength is -12.7%, a notable divergence that suggests the stock outperformed recently but lagged the broader market over the past six months. This divergence could signal a temporary pullback or a period of mean reversion, especially as the 1-year relative strength remains a strong +38.3%. Key technical levels to watch are support at the 52-week low of 75.42, with intermediate support likely around the 100-105 area, and resistance at the 52-week high of 141.96. A breakout above 141.96 would confirm the uptrend and could open the door to further gains, while a breakdown below 100 would signal a trend reversal and potentially a retest of the 75.42 low. The stock's beta of 0.399 means it is significantly less volatile than the market, which is attractive for risk-averse investors but also means it may underperform in a strong bull market; the max drawdown of -25.75% over the past year further illustrates its defensive nature.
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
+51.8%
Cumulative gain past year
| Period | CF Return | S&P 500 |
|---|---|---|
| 1m | +7.3% | -1.0% |
| 3m | +24.1% | +2.0% |
| 6m | +2.2% | +17.4% |
| 1y | +51.8% | +15.0% |
| ytd | +59.4% | +11.7% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CF Fundamental Analysis
CF Industries has demonstrated robust revenue growth, with Q1 2026 revenue of $1.986 billion representing a 19.4% year-over-year increase from Q1 2025's $1.663 billion. This acceleration is part of a multi-quarter trend: Q4 2025 revenue was $1.872 billion (up from $1.524 billion in Q4 2024), Q3 2025 was $1.659 billion (up from $1.370 billion), and Q2 2025 was $1.890 billion (up from $1.572 billion). The revenue segments show a diversified mix, with ammonia contributing $627 million, UAN $583 million, urea $590 million, and AN $69 million in the most recent quarter, indicating that the growth is broad-based across nitrogen products. The strong top-line performance is largely driven by favorable pricing due to the global supply disruption, and the investment case hinges on whether these elevated prices can be sustained. Profitability is excellent: Q1 2026 net income was $615 million, with a net margin of 30.97%, and gross margin was 37.56%. Operating margin stood at 32.23%, and EBITDA was $1.111 billion, representing a 55.9% EBITDA margin. Margins have been expanding over recent quarters, with gross margin improving from 34.3% in Q4 2024 to 37.6% in Q1 2026, and net margin rising from 18.8% in Q1 2025 to 31.0% in Q1 2026. This margin expansion is a direct result of higher selling prices and low natural gas feedstock costs, and it compares favorably to the agricultural inputs industry, where margins are typically thinner. The balance sheet is solid, with a current ratio of 3.37, a debt-to-equity ratio of 0.816, and a cash balance of $2.042 billion as of Q1 2026. Free cash flow on a trailing twelve-month basis is $1.621 billion, and the company generated $496 million in operating cash flow in Q1 2026, easily covering capital expenditures of $223 million and dividends of $78 million. The FCF yield is approximately 12.9% based on the current market cap of $12.54 billion, which is attractive and suggests the company can fund growth internally. ROE is a strong 30.1%, and ROA is 12.9%, indicating efficient capital deployment. The company also repurchased $28 million of stock in Q1 2026, continuing its shareholder return program.
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
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CF Overvalued?
Since CF Industries is profitable with positive net income of $615 million in Q1 2026, the PE ratio is the primary valuation metric. The trailing PE is 8.61x, while the forward PE is 12.45x, which is unusual because the forward PE is higher than the trailing PE, implying that the market expects earnings to decline from the current elevated levels. This gap suggests that analysts are pricing in a normalization of nitrogen prices as the geopolitical supply shock fades, leading to lower future earnings. The PEG ratio of 0.26 is very low, indicating that the stock is cheap relative to its expected earnings growth, but this may be misleading if growth is expected to contract. Compared to the agricultural inputs industry, CF's trailing PE of 8.61x is significantly below the sector average, which typically ranges from 15x to 20x. The PS ratio is 1.77x, and the EV/EBITDA is 4.41x, both of which are also low relative to peers. For instance, the industry average EV/EBITDA is often around 8-10x, so CF is trading at a roughly 50% discount. This discount appears justified by the cyclical nature of the business and the fact that current earnings are inflated by a temporary supply shock. However, if the supply disruption persists, the stock could re-rate higher. Historically, CF's PE ratio has ranged from as low as 3.8x in mid-2022 to as high as 25x in late 2023, with a median around 10x. The current trailing PE of 8.61x is near the lower end of this historical range, suggesting that the market is pricing in a significant earnings decline. The PS ratio of 1.77x is also near the low end of its historical range (which has been as high as 12.9x in 2023), further indicating that the stock is cheap on a sales basis. This could represent a value opportunity if the company can maintain its elevated margins, but it also reflects the market's skepticism about the sustainability of current profitability.
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 and operational risks for CF are moderate but centered on the sustainability of its current earnings. The company's debt-to-equity ratio of 0.816 is manageable, and its current ratio of 3.37 indicates strong liquidity, with $2.042 billion in cash. However, the trailing PE of 8.61x and forward PE of 12.45x imply that the market expects earnings to decline, which could pressure the stock if margins compress. Additionally, CF's revenue is concentrated in nitrogen products, with ammonia, UAN, and urea each contributing roughly 30% of sales, exposing it to price swings in a single commodity complex. The payout ratio of 22.4% and FCF yield of 12.9% provide some cushion, but a sharp drop in nitrogen prices could reduce cash flow and limit shareholder returns.
Market and competitive risks are significant given CF's low beta of 0.399, which means it is less volatile than the market but may underperform in strong bull markets. The stock has surged 66.1% year-to-date, largely due to the geopolitical supply shock, and any resolution of the Strait of Hormuz blockade could trigger a sharp reversal. Recent news on April 17, 2026, reported that the Strait of Hormuz reopened, causing oil prices to plunge and a broad market rally, which could reduce the geopolitical premium embedded in CF's stock. Furthermore, the agricultural inputs industry is highly competitive, and CF faces competition from other low-cost producers in the Middle East and Russia, which could pressure prices if supply normalizes. The wide analyst target range ($98 to $195.72) underscores the uncertainty and the potential for significant price swings.
In a worst-case scenario, a full normalization of global nitrogen supply combined with a decline in agricultural demand could lead to a sharp earnings decline and multiple compression. The 52-week low is $75.42, which represents a potential downside of approximately -43% from the current price of $133.07. The analyst low target of $98.00 implies a -26% downside, and the max drawdown over the past year was -25.75%. If the geopolitical premium fully unwinds and nitrogen prices revert to mid-cycle levels, CF's earnings could fall below $5 per share, and the stock could retest its 52-week low, resulting in a loss of over 40% from current levels. This scenario would be exacerbated if the company's blue and green ammonia investments fail to gain traction, leaving it with stranded assets.
FAQ
The key risks for CF include: 1) Geopolitical risk: The reopening of the Strait of Hormuz could flood the market with fertilizer supply, causing nitrogen prices to plummet and CF's margins to compress. 2) Cyclical risk: CF operates in a highly cyclical industry, and a global recession could reduce agricultural demand and fertilizer prices. 3) Valuation risk: The forward PE of 12.45x is higher than the trailing PE of 8.61x, indicating that the market expects earnings to decline; if earnings fall more than expected, the stock could de-rate further. 4) Operational risk: CF's investments in blue and green ammonia may not generate expected returns, and natural gas price spikes could erode its cost advantage. The most severe risk is a full supply normalization, which could drive the stock down to the analyst low target of $98 or even the 52-week low of $75.42.
The 12-month forecast for CF is neutral with a slight bearish tilt. The base case (50% probability) sees the stock trading in a range of $115 to $135 as nitrogen prices normalize but CF's low-cost position supports profitability. The bull case (25% probability) targets $160 to $195 if the supply disruption persists and the company successfully advances its blue/green ammonia projects. The bear case (25% probability) targets $75 to $98 if global supply normalizes and agricultural demand weakens. The most likely scenario is the base case, with the key assumption that the Strait of Hormuz remains open and nitrogen prices gradually decline but stay above mid-cycle levels. The analyst average target of $124.72 aligns with the base case.
CF appears fairly valued to slightly undervalued on trailing metrics, but the market is pricing in a significant earnings decline. The trailing PE of 8.61x is below the agricultural inputs industry average of 15-20x, and the EV/EBITDA of 4.41x is roughly half the typical 8-10x range. However, the forward PE of 12.45x is higher than the trailing PE, which is unusual and implies that analysts expect earnings to fall. The PS ratio of 1.77x is near the low end of its historical range, suggesting the stock is cheap on a sales basis. Overall, the valuation reflects skepticism about the sustainability of current profitability, and the stock is not overvalued relative to its own history, but it is not a deep value opportunity either.
CF is a good buy for income-focused investors seeking exposure to a low-cost nitrogen producer with a 2.6% dividend yield and a 12.9% free cash flow yield. However, the stock is trading at $133.07, which is above the analyst average target of $124.72, implying a -6.3% downside. The trailing PE of 8.61x is attractive, but the forward PE of 12.45x suggests earnings are expected to decline as the geopolitical supply shock fades. The biggest downside risk is a full reopening of the Strait of Hormuz, which could cause nitrogen prices to collapse and the stock to retest its 52-week low of $75.42. Therefore, it is a good buy only for investors with a long-term horizon who can tolerate cyclicality and are willing to accumulate on dips.
CF is more suitable for long-term investment than short-term trading. The stock has a low beta of 0.399, meaning it is less volatile than the market, and it pays a reliable dividend with a 2.6% yield and a low payout ratio of 22.4%. The company's low-cost production advantage provides a durable competitive moat that supports long-term cash flow generation. However, the current earnings are elevated due to a temporary supply shock, and the stock is trading near the upper end of its 52-week range, making it less attractive for short-term momentum plays. A suggested minimum holding period is 2-3 years to ride out the cyclical downturn and benefit from the company's strategic investments in blue and green ammonia. Short-term traders should be cautious of the potential for a sharp reversal if the geopolitical situation resolves.
