CF Industries (CF) Stock Up 12% in 6 Months: What's Driving It?
CF Industries Holdings, Inc.’s CF shares have popped 11.6% over the past six months. The company has also outperformed its industry’s decline of 12.6% over the same time frame. Moreover, it has topped the S&P 500’s 7.5% rise over the same period.
Let’s take a look at the factors behind this Zacks Rank #3 (Hold) stock’s price appreciation.
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CF Gains on Higher Nitrogen Demand, Lower Gas Costs
CF Industries is benefiting from healthy nitrogen fertilizer demand in major markets and lower natural gas costs amid headwinds from lower nitrogen prices. The company is well-positioned to capitalize on rising nitrogen fertilizer demand in major markets. Higher crop commodity prices are contributing to healthy demand globally.
In North America, demand for nitrogen is expected to be driven by high levels of corn planted acres in the United States and favorable farm economics. Increased planted corn acres, higher crop prices and healthy farm economics are also likely to support urea demand in Brazil. CF also expects demand in India to be driven by the government’s plans to maintain high urea volumes in stock.
Lower natural gas prices are also acting in the company’s favor. CF Industries saw a significant decline in natural gas costs in the second quarter of 2023. Average cost of natural gas fell to $2.75 per MMBtu in the second quarter of 2023 from $7.05 per MMBtu in the year-ago quarter. Lower natural gas costs led to a decline in the company's cost of sales. The benefits of reduced gas costs are expected to continue in the third quarter.
The company also remains committed to boosting shareholders’ value by leveraging strong cash flows. Net cash provided by operating activities was $712 million in the second quarter. During the first half of 2023, CF repurchased 3.1 million shares for $205 million, which included the purchase of 2 million shares for $130 million in the second quarter.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
Stocks to Consider
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation CRS, Hawkins, Inc. HWKN and Alamos Gold Inc. AGI.
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 86% in a year.
Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.
Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 51% in a year.
Alamos Gold currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for AGI's current-year earnings has been revised 13.2% upward over the past 60 days.
The Zacks Consensus Estimate for current fiscal-year earnings for Alamos Gold is currently pegged at 43 cents, implying year-over-year growth of 53.6%. AGI shares have gained around 69% in a year.
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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
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Hawkins, Inc. (HWKN) : Free Stock Analysis Report
