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CF Industries Holdings, Inc. (NYSE:CF): What’s The Analyst Consensus Outlook?

Heidi Stubbs

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In December 2018, CF Industries Holdings, Inc. (NYSE:CF) released its latest earnings announcement, which revealed that the company faced a substantial headwind with earnings declining by -19%. Investors may find it useful to understand how market analysts predict CF Industries Holdings’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for CF Industries Holdings

Analysts’ outlook for the coming year seems buoyant, with earnings climbing by a significant 97%. This strong growth in earnings is expected to continue, bringing the bottom line up to US$789m by 2022.

NYSE:CF Future Profit February 18th 19

Although it is informative knowing the growth rate year by year relative to today’s figure, it may be more beneficial to gauge the rate at which the business is moving every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of CF Industries Holdings’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 24%. This means, we can assume CF Industries Holdings will grow its earnings by 24% every year for the next couple of years.

Next Steps:

For CF Industries Holdings, I’ve put together three pertinent aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is CF worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CF is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CF? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.