Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 3 Jul, 25 | CF | Buy | USD 93.85 | USD 98.5 | USD 103.0 | 6 days | Closed |
5.22%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
CF Industries Holdings, Inc., together with its subsidiaries, engages in the manufacture and sale of hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities in North America, Europe, and internationally. It operates through Ammonia, Granular Urea, UAN, AN, and Other segments. The company's principal products include anhydrous ammonia, granular urea, urea ammonium nitrate, and ammonium nitrate products. It also offers diesel exhaust fluid, urea liquor, nitric acid, and aqua ammonia products. The company primarily serves cooperatives, independent fertilizer distributors, traders, wholesalers, and industrial users. CF Industries Holdings, Inc. was founded in 1946 and is headquartered in Northbrook, Illinois.
Significant Shareholder Return: CF Industries repurchased 5.4 million shares worth USD434 million in Q1 and announced a new USD2 billion share buyback program through 2029
Q1 2025 Net Earnings Increase: Net income rose to USD312 million, up from USD194 million in Q1 2024 — a 61% year-over-year increase
High Capital Expenditures Ahead: Projected capital expenditures of up to USD900 million in 2025, with USD300–USD400 million tied to a long-horizon joint venture, may constrain near-term cash flow
Higher Natural Gas Costs: The average natural gas cost increased to USD3.68/MMBtu in Q1 2025 from USD3.19/MMBtu in Q1 2024, pressuring margins
CF Industries faces investment risk from substantial capital commitments to long-term decarbonization projects, which may be vulnerable to regulatory changes, construction delays, and evolving market dynamics in global ammonia demand
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 93.85 | 80.0 | 98.5 | 103.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Financial Results and Shareholder Returns: In Q1 2025, CF Industries Holdings, Inc. reported solid financial performance, achieving net earnings of USD312 million or USD1.85 per diluted share, compared to USD194 million or USD1.03 per share in Q1 2024. The company posted EBITDA of USD617 million and adjusted EBITDA of USD644 million, both reflecting significant year-over-year growth. Net sales rose to USD1.66 billion, supported by higher average selling prices and increased product volumes. Additionally, CF Industries returned USD434 million to shareholders through the repurchase of 5.4 million shares during the quarter, with an authorization of a new USD2 billion share buyback program extending through 2029.
Strategic Joint Venture for Low-Carbon Ammonia Production: CF Industries announced the formation of the Blue Point joint venture with JERA Co., Inc. and Mitsui & Co., Ltd., aimed at developing a low-carbon ammonia production facility in Ascension Parish, Louisiana. The joint venture, with respective ownership stakes of 40%, 35%, and 25%, will invest approximately USD4 billion to build the facility, which is expected to be the largest of its kind globally with a 1.4 million metric ton annual nameplate capacity. Production is slated to commence in 2029, with CF Industries responsible for operations and the construction of shared infrastructure worth approximately USD550 million.
Operational Efficiency and Safety Improvements: Operational performance improved markedly in Q1 2025, with gross ammonia production increasing to 2.6 million tons from 2.1 million tons in the prior-year quarter, driven by reduced outages and more stable operating conditions. The company reported a 12-month rolling average recordable incident rate of just 0.34 incidents per 200,000 work hours, reflecting a strong safety culture. For the full year, CF Industries anticipates total ammonia production of approximately 10 million tons.
Capital Investment and Project Development Outlook: Capital expenditures in Q1 2025 totaled USD132 million. For the full year, total capex is projected at USD800–USD900 million, including USD300–USD400 million related to the Blue Point joint venture and USD500 million for the existing operational network. Capital investments exclude contributions from joint venture partners. Significant progress is being made on other strategic initiatives, including carbon capture projects at the Donaldsonville and Yazoo City complexes and a nitrous oxide (N2O) abatement project at the Verdigris facility, expected to reduce emissions by 600,000 metric tons annually starting in 2025.
Positive Market Outlook Supported by Global Supply Constraints: CF Industries maintains a constructive outlook for the nitrogen fertilizer market, supported by strong global demand, below-average inventories, and supply-side challenges, including natural gas shortages in Iran and continued export restrictions in China. The U.S. corn planting forecast for 2025 stands at 95.3 million acres, which is expected to drive nitrogen demand. Brazil and India are also anticipated to increase urea imports due to strong planting activity and reduced domestic inventories. Meanwhile, structural production disadvantages in Europe and Asia are expected to preserve CF’s cost advantage over the medium to long term.
Strategic Commitment to Decarbonization and ESG Leadership: The company continues to lead in sustainability through investments in low-carbon technologies and partnerships. The Donaldsonville and Yazoo City carbon capture projects, in collaboration with ExxonMobil, aim to sequester up to 2.5 million metric tons of CO₂ annually by 2028. Furthermore, CF Industries co-founded the Low Carbon Fertilizer Alliance, which will support emissions reduction initiatives such as the Verdigris N₂O abatement project. These initiatives are expected to generate tax credits under Section 45Q of the U.S. Internal Revenue Code, enhancing the company’s long-term financial sustainability.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on CF Industries Holdings, Inc. (NYSE: CF) at the closing market price of USD 93.85, as on July 02, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Agricultural Inputs
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CF CF Industries Holdings Inc |
0.22 0.24% | 92.01 | 14.08 | 13.59 | 2.58 | 2.96 | 2.80 | 5.90 |
| CTVA Corteva Inc |
-0.465 0.64% | 72.70 | 30.23 | 15.58 | 1.89 | 1.30 | 2.10 | 13.87 |
| NTR Nutrien Ltd |
1.74 2.98% | 60.06 | 54.62 | 15.27 | 1.14 | 1.17 | 1.64 | 10.45 |
| MOS The Mosaic Company |
0.84 2.40% | 36.12 | 9.17 | 11.07 | 0.78 | 0.98 | 1.00 | 5.38 |
| YARIY Yara International ASA |
-0.1 0.53% | 18.65 | 16.03 | 10.56 | 0.52 | 1.25 | 0.71 | 5.89 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 02,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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