Scotiabank downgrades CF Industries on fading nitrogen momentum

Scotiabank downgraded CF Industries to Sector Perform from Outperform with a price target of $90, down from $95. European gas prices have doubled since the summer, with nitrogen prices forced to keep up, as limited global availability has required marginal cost European producers to run their plants, the analyst tells investors in a research note. In addition, the firm expects to see the availability of merchant ammonia improve significantly, ending hope for a premium over marginal cost. It says that while CF will indirectly benefit from rising tension in the Middle East, “this is a wildcard, not an investment thesis.” Scotiabank cites fading nitrogen momentum for the downgrade.