CF Industries (CF) Gets Antitrust Nod for Waggaman Plant Buyout
CF Industries Holdings, Inc. CF has announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), in connection with its earlier announced agreement to acquire Incitec Pivot Limited's ("IPL") ammonia production complex in Waggaman, LA.
The expiration of the HSR Act waiting period was a requirement for the transaction to close. Subject to the satisfaction of other usual closing conditions, CF Industries and IPL plan to complete the deal on Dec 1, 2023.
The Waggaman ammonia plant and related assets will be purchased by CF Industries for $1.675 billion under the terms of the agreement. Approximately $425 million of the purchase price will be allocated to a long-term ammonia offtake arrangement under which CF Industries will deliver up to 200,000 tons of ammonia per year to IPL's Dyno Nobel subsidiary at production economics. CF Industries anticipates using cash on hand to fund the remaining $1.25 billion of the purchase price.
Shares of CF have lost 21.2% over the past year compared with a 31.9% decline of its industry.
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The company, on its third-quarter call, said that the global nitrogen supply-demand balance will continue to be positive owing to robust demand from agricultural and forward energy curves displaying an elevated cost curve. Energy price differences between producers in North America and marginal producers in Europe and Asia continue to be significantly higher than historical levels. These stronger differentials are expected to last for a considerable amount of time, based on forward energy curves.
According to the company, there will continue to be considerable margin opportunities for low-cost North American producers on the back of the global nitrogen cost curve. CF also expects demand to remain solid through the end of this year and into 2024, led by India and Brazil.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
Zacks Rank & Key Picks
CF Industries currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.
Carpenter Technology has a projected earnings growth rate of 213.2% for the current fiscal year. It currently carries a Zacks Rank #1 (Strong Buy). CRS delivered a trailing four-quarter earnings surprise of roughly 14.3%, on average. The stock is up around 69.1 % in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #1. AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 16.2% in a year.
Andersons currently carries a Zacks Rank #2. The stock has gained roughly 33.3% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
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