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Cf Industries Holdings (CF)
NYSE:CF
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Cf Industries Holdings
(NYSE:CF)73Outperform
Positive Factors
Cost Advantage
CF is relatively better-positioned because of the non-discretionary nature of nitrogen usage as well as its cost advantage with US natural gas.
Share Repurchase
CF's repurchase of another 4.4M shares for $385M brings 2024's total to 18.8 million for $1.51B, indicating strong share repurchase activity.
Negative Factors
Market Supply
China is expected to increase urea exports significantly after a period of low exports, which could impact the market negatively.
Natural Gas Costs
Recent increase in natural gas cost will negatively impact CF's profitability.
Cf Industries Holdings (CF) vs. S&P 500 (SPY)
Market Cap
$12.76B
Dividend Yield2.56%
Average Volume (3M)2.92M
Price to Earnings (P/E)11.2
Beta (1Y)0.33
Revenue Growth-10.48%
EPS Growth-13.78%
CountryUS
Employees2,700
SectorBasic Materials
Sector Strength56
IndustryAgriculture
Share Statistics
EPS (TTM)6.76
Shares Outstanding169,536,800
10 Day Avg. Volume3,477,374
30 Day Avg. Volume2,918,136
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.23
Price to Cash Flow (P/CF)7.90
P/FCF Ratio7.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$93.42Price Target Upside22.42% Upside
Rating ConsensusHold
Number of Analyst Covering12
Cf Industries Holdings Business Overview & Revenue Model
Company DescriptionCF Industries Holdings, Inc. engages in the manufacture and distribution of nitrogen fertilizer. The firm owns and operates nitrogen plants and serves agricultural and industrial customers through its distribution system. It operates through following segments: Ammonia, Granular Urea, UAN, AN, and Other. The Ammonia segment produces anhydrous ammonia, which is company's most concentrated nitrogen fertilizer product as it contains 82% nitrogen. The Granular Urea segment produces granular urea, which contains 46% nitrogen. The UAN segment produces urea ammonium nitrate solution, which is a liquid fertilizer product with a nitrogen content from 28% to 32%, is produced by combining urea and ammonium nitrate. The AN segment produces ammonium nitrate, which is a nitrogen-based product with a nitrogen content between 29% and 35%. The Other segment includes diesel exhaust fluid, nitric acid, urea liquor and aqua ammonia. The company was founded in 1946 and is headquartered in Deerfield, IL.
How the Company Makes MoneyCF Industries makes money through the production and sale of nitrogen-based fertilizers, which are sold to agricultural customers, distributors, and industrial users worldwide. The company's key revenue streams include the sale of ammonia, granular urea, urea ammonium nitrate (UAN), and ammonium nitrate. These products are essential for crop growth and are in high demand among farmers seeking to increase crop yields. CF Industries benefits from a strong distribution network and strategic partnerships with agricultural cooperatives and retailers, enabling broad market reach and stable sales channels. Additionally, the company may engage in long-term supply contracts, which provide predictable revenue streams and contribute to its financial stability.
Cf Industries Holdings Financial Statement Overview
Summary
CF Industries Holdings demonstrates strong profitability and a robust balance sheet, with high margins and a secure equity position. However, recent revenue decline and a drop in free cash flow growth pose challenges that need addressing to sustain long-term stability. Overall, the company remains financially sound with opportunities for improvement in revenue growth.Income Statement
CF Industries Holdings has shown strong profitability with a TTM gross profit margin of 34.09% and a net profit margin of 20.51%. However, there is a notable revenue contraction of 10.47% from the previous year, indicating some challenges in maintaining top-line growth. The EBIT margin stands at a robust 21.19%, and the EBITDA margin is 34.67%, showcasing solid operational efficiency.78
Positive
Balance Sheet
The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.43, indicating a stable leverage position. The return on equity (ROE) is an impressive 16.04%, reflecting strong profitability relative to shareholder equity. The equity ratio of 56.36% highlights a solid capital structure with significant equity in relation to assets.82
Very Positive
Cash Flow
The cash flow analysis shows a decrease in free cash flow by 22.38% compared to the previous year. Despite this, the operating cash flow to net income ratio is 1.86, indicating good cash generation relative to net income. The free cash flow to net income ratio is 1.44, suggesting efficient conversion of profits into free cash flow.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.94B | 6.63B | 11.19B | 6.54B | 4.12B | Gross Profit |
| 2.06B | 2.54B | 5.86B | 2.39B | 801.00M | EBIT |
| 1.75B | 2.23B | 5.40B | 1.73B | 623.00M | EBITDA |
| 2.83B | 3.27B | 6.28B | 3.07B | 1.53B | Net Income Common Stockholders |
| 1.22B | 1.52B | 3.35B | 1.26B | 432.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.61B | 2.03B | 2.32B | 1.63B | 683.00M | Total Assets |
| 13.47B | 14.38B | 13.31B | 12.38B | 12.02B | Total Debt |
| 3.25B | 3.23B | 3.23B | 3.72B | 4.22B | Net Debt |
| 1.63B | 1.20B | 902.00M | 2.09B | 3.54B | Total Liabilities |
| 5.87B | 6.00B | 5.46B | 6.34B | 6.42B | Stockholders Equity |
| 4.99B | 5.72B | 5.05B | 3.21B | 2.92B |
| Cash Flow | Free Cash Flow | |||
| 1.75B | 2.26B | 3.39B | 2.35B | 922.00M | Operating Cash Flow |
| 2.27B | 2.76B | 3.85B | 2.87B | 1.23B | Investing Cash Flow |
| -469.00M | -1.68B | -440.00M | -466.00M | -299.00M | Financing Cash Flow |
| -2.21B | -1.37B | -2.70B | -1.46B | -542.00M |
Cf Industries Holdings Technical Analysis
Negative
76.31
Price Trends
86.25
Negative
86.04
Negative
81.24
Negative
Market Momentum
-2.92
Positive
34.08
Neutral
19.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CF, the sentiment is Negative. The current price of 76.31 is below the 20-day moving average (MA) of 81.88, below the 50-day MA of 86.25, and below the 200-day MA of 81.24, indicating a bearish trend. The MACD of -2.92 indicates Positive momentum. The RSI at 34.08 is Neutral, neither overbought nor oversold. The STOCH value of 19.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CF.
Cf Industries Holdings Risk Analysis
Cf Industries Holdings disclosed 23 risk factors in its most recent earnings report. Cf Industries Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cf Industries Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $12.76B | 11.17 | 24.43% | 2.56% | -10.48% | -13.78% | |
63 Neutral | $7.33B | 42.32 | 1.52% | 3.60% | -18.79% | -84.24% | |
54 Neutral | $319.17M | ― | -36.73% | ― | -8.74% | -492.08% | |
54 Neutral | $482.11M | ― | -2.68% | ― | -12.01% | -174.13% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% | |
46 Neutral | $3.45B | ― | 4.98% | 4.72% | 3.61% | 94.27% |
* Basic Materials Sector Average
Performance Comparison
CF
Cf Industries Holdings
76.31
-3.26
-4.10%
IPI
Intrepid Potash
25.81
4.41
20.61%
LXU
Lsb Industries
6.89
-0.42
-5.75%
MOS
Mosaic Co
24.13
-6.61
-21.50%
SMG
Scotts Miracle-Gro Company
62.05
-1.17
-1.85%
NTR
Nutrien
49.87
-0.33
-0.66%
Cf Industries Holdings Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -8.95% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call for CF Industries highlighted robust financial performance and strategic progress, particularly in carbon capture initiatives and ammonia production efficiency. Despite concerns over increased capital expenditure for future projects, the overall market outlook remains positive with strong demand expectations in the nitrogen sector.Highlights
Strong Financial Performance
CF Industries generated adjusted EBITDA of $2.3 billion for the full year 2024. The company returned $1.9 billion to shareholders through dividends and share repurchases, marking the highest level of capital return in more than a decade.
Operational Efficiency
CF Industries achieved a 100% ammonia utilization rate, producing over 2.6 million tons of gross ammonia in Q4 and 9.8 million tons for the full year 2024.
Strategic Initiatives Progress
The carbon capture and sequestration project at the Donaldsonville complex is nearing completion, with commissioning activities underway. The FEED study for the Blue Point complex's low-carbon ammonia plant has been completed.
Positive Nitrogen Market Outlook
Global nitrogen market dynamics are favorable, with strong demand expected due to low world corn stocks and positive corn to soybean ratios. The supply-demand balance is projected to tighten further by the end of the decade.
Lowlights
Capital Expenditure Increase
The projected cost for the auto thermal reforming ammonia plant with carbon capture has increased to approximately $4 billion, with an additional $500 million required for scalable infrastructure.
Maintenance and Operational Challenges
Q1 of 2024 saw significant maintenance activities impacting operations, with 15 of 17 ammonia plants requiring attention, costing $100 million to $150 million.
Company Guidance
In the CF Industries conference call for the full year and fourth quarter of 2024, the company provided a robust financial outlook with key metrics illustrating its strong performance and strategic initiatives. The company reported an adjusted EBITDA of $562 million for Q4 2024 and $2.3 billion for the full year. CF Industries returned $1.9 billion to shareholders through dividends and share repurchases, marking the highest level of capital return in over a decade. The production network achieved a 100% ammonia utilization rate in Q4, producing over 2.6 million tons of gross ammonia and ending the year with 9.8 million tons. The company forecasts approximately 10 million tons of gross ammonia production in 2025. CF is advancing its carbon capture and sequestration project at the Donaldsonville complex, expecting start-up and 45Q tax credit generation this year. The evaluation of a greenfield low-carbon ammonia plant at the Blue Point complex in Louisiana is nearing completion, with a final investment decision expected in Q1 2025. The company is targeting a cash flow to adjusted EBITDA conversion rate of 63% and has $1 billion remaining on its share repurchase authorization for 2025. The global nitrogen market is expected to remain tight, with strong demand anticipated, particularly in the United States, driven by low world corn stocks and favorable planting conditions.Cf Industries Holdings Corporate Events
Executive/Board Changes
CF Industries Approves Retention Award for Executive
Neutral
Jan 6, 2025
CF Industries Holdings, Inc. has approved a retention award for Susan L. Menzel, the Executive Vice President and Chief Administrative Officer, consisting of 28,637 restricted stock units under the company’s 2022 Equity and Incentive Plan. These units will fully vest by January 2, 2028, enhancing employee retention and aligning executive interests with the company’s long-term growth objectives, with specific conditions outlined for accelerated vesting.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.