CF Industries has recently hit a rough patch due to falling inflation expectations and lower fertilizer prices. However, we expect shares to soon stage a tactical rebound
CF $CF Industries Holdings(CF.US$ Industries is the largest nitrogen fertilizer producer in North America, boasting strong earnings and an extensive distribution network. With around 80% of its nitrogen sold as fertilizer, CF's profits are closely tied to U.S. corn-planted acreage. The company has pursued a strategic approach of capacity expansion, share repurchases, and M&A activity aimed at boosting its effective nitrogen capacity per share.
While CF has greatly benefited from tight global nitrogen supplies, driven by reduced production in the EU and China, and strong agricultural fundamentals, it is also aggressively investing in carbon-free ammonia to tap into the growing demand for low-carbon fuels. Although nitrogen prices have fallen with the stabilization of European natural gas prices, CF's focus on innovation and expansion positions it well for continued success.
We would be overweight at the 65 region for a round-trip back to 70+ in the coming weeks.
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181453741 : overweight?