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CF Industries (CF) Hits New 52-Week High: What's Driving It?

Zacks Equity Research

Shares of CF Industries Holdings, Inc. CF scaled a fresh 52-week high of $43.10 on Dec 27, before eventually closing the day at $43.07.

CF Industries has a market cap of roughly $10 billion. Average volume of shares traded in the last three months is around 3,603.7K. The company has an expected long-term EPS growth of 8%.

Shares of CF Industries have rallied 22.5% in the past three months, outperforming the industry’s 8.6% growth.


Driving Factors

In November 2017, CF Industries noted that the third quarter witnessed a rapid increase in the global price of urea from the second quarter, which was driven by considerably lower Chinese exports, higher production and energy costs, a weaker dollar and strong global demand. The company expects lower Chinese urea export volumes to continue and volatility in nitrogen prices in global markets to continue through 2018.

CF Industries is likely to benefit from higher nitrogen demand. During the last reported quarter, Brazil was major purchaser of nitrogen and India issued three tenders, which resulted in purchase of 1.4 million metric tons urea.

The company expects a consistent global nitrogen demand growth, which should be partly driven by rising global population and industrial growth on the back of increased adoption of emission control, recovering mining sector and synthetic nitrogen products.  

CF Industries is also well placed to gain from its efforts to boost production capacity. It is also enjoying the benefit of abundant natural gas supply.

CF Industries Holdings, Inc. Price and Consensus


CF Industries Holdings, Inc. Price and Consensus | CF Industries Holdings, Inc. Quote


Zacks Rank & Stocks to Consider

CF Industries currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Westlake Chemical Corporation WLK, Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have soared 88.7% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied a whopping 196.5% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have surged 118.5% year to date.

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