U.S. Markets closed

CF Industries (CF) Gains But Lags Market: What You Should Know

Zacks Equity Research
Dril-Quip (DRQ) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

CF Industries (CF) closed at $44.09 in the latest trading session, marking a +0.69% move from the prior day. The stock lagged the S&P 500's daily gain of 1.32%. Elsewhere, the Dow gained 1.38%, while the tech-heavy Nasdaq added 1.74%.

Heading into today, shares of the fertilizer maker had gained 7.25% over the past month, lagging the Basic Materials sector's gain of 7.33% and outpacing the S&P 500's gain of 4.16% in that time.

Investors will be hoping for strength from CF as it approaches its next earnings release, which is expected to be February 13, 2019. In that report, analysts expect CF to post earnings of $0.49 per share. This would mark year-over-year growth of 2550%. Meanwhile, our latest consensus estimate is calling for revenue of $1.30 billion, up 18% from the prior-year quarter.

Any recent changes to analyst estimates for CF should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.68% lower. CF currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, CF is holding a Forward P/E ratio of 17.31. This valuation marks a premium compared to its industry's average Forward P/E of 16.78.

Meanwhile, CF's PEG ratio is currently 2.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Fertilizers industry currently had an average PEG ratio of 1.79 as of yesterday's close.

The Fertilizers industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 49, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research