CF Industries: Overlooked OCI Merger Promises 60%+ Upside
Mohit Hajarnis • 13 Comments
Mohit Hajarnis • 13 Comments
CF Industries: Long-Term Value Creator, Near-Term Catalysts
Brian Hikisch, CFA • 11 Comments
Brian Hikisch, CFA • 11 Comments
CF Industries: Undervalued Market Leader
Christopher Bayliss • 40 Comments
Christopher Bayliss • 40 Comments
Fri, Jul. 22, 5:02 PM
Wed, Jul. 13, 11:45 AM
- Mosaic (MOS -0.2%) is downgraded to Sector Perform from Outperform with a $27 price target at RBC Capital, which sees phosphate margins taking longer than expected to recover from near five-year lows, while MOS's input cost advantages have been eroded by weak market prices for ammonia and sulphur.
- The firm also believes MOS management has done well to lower costs and optimize operations, but continued challenges in potash and phosphate fundamentals limit upside.
- RBC also cuts its stock price target for CF Industries (CF +0.4%) to $26 from $30, forecasting a modest but short-lived recovery in nitrogen prices.
Fri, Jul. 8, 2:34 PM
- CF Industries (CF +5.9%) is upgraded to Outperform from Market Perform with a $28 price target at BMO Capital, which observes more solid recent prices for fertilizer.
- "It is early for a broad fertilizer rebound (oversupply), but we are comfortable adding risk as downside may be better priced in post a second quarter reset, more so for nitrogen (trading near floors) than potash/phosphate," the firm says.
- BMO says CF is the leading free cash flow generator among North American fertilizer makers despite a ~50% cut to estimates, with a $1.20 dividend; the firm estimates $1.93/share of free cash flow in 2017, implying an 8% FCF yield.
Thu, Jun. 23, 8:58 AM
- Potash Corp. (NYSE:POT) +3.2% and Mosaic (NYSE:MOS) +2.6% premarket following reports that Belarus may cooperate with Russian potash producer Uralkali for the first time since a dispute ended the alliance between the world's two biggest potash producers in 2013, triggering a fall in global prices that have not yet fully recovered.
- Belarus Pres. Lukashenko hinted at cooperation during an event in Minsk but did not discuss his conditions; the previous joint venture was based in Minsk, at that time a crucial condition for Belarus and the main concern for Uralkali.
- Lukashenko also said Belaruskali had signed a new potash supply contract with India, although the company later said it was still finalizing the deal; aside from Belaruskali and Uralkali, POT, MOS and Germany's K+S (OTCQX:KPLUY) supply potash to India.
- Other relevant tickers: AGU, CF, IPI, ICL, CNHI, SQM, UAN, IPHS, EVGN
Tue, Jun. 14, 6:05 PM
- Agrium (NYSE:AGU) is reiterated with a Buy rating and a new $102 price target, lifted from $93, at UBS, which believes fertilizer markets are bottoming as agriculture fundamentals and crop prices improve.
- The firm says the recent run-up in crop prices has improved sentiment on ag-related names and could bode well for farmers' income and willingness to spend on fertilizers going forward.
- AGU hosted an investor day last week, and UBS sees the data provided by the company as a proxy for the state of the broader fertilizer industry, given that the company is a large player in nitrogen, phosphate and potash markets.
- Related tickers: POT, MOS, CF, IPI.
Fri, Jun. 3, 2:52 PM
- CF Industries (CF +2.2%) is resumed with a Neutral rating and $30 price target at Goldman Sachs, which sees the current risk/reward as balanced, given “persistent uncertainty on the global urea cost curve and near-term oversupply concerns as [North American] capacity additions peak over the next nine months.”
- Goldman likes CF's robust free cash flow profile but also notes increased earnings sensitivity to small prices changes for nitrogen, and says the company’s desire to maintain an investment-grade credit rating was limiting a sharp increase in cash return to shareholders in the near term.
- The firm says CF’s 4.3% dividend yield appears sustainable and 12% estimated 2017 free cash flow yield "is intriguing, though leverage concerns near-term may limit sizable cash return.”
Mon, May 23, 4:59 PM
- CF Industries (NYSE:CF) surged 4.5% in today's trade after it abandoned its deal for rival nitrogen fertilizer maker OCI in the face of new U.S. tax inversion rules, as investors reacted favorably to the termination amid the weakened outlook for the nitrogen market.
- "The deal just started to look more and more dilutive. Once you took out the benefits that they were hoping to get from the tax synergies, then the deal no longer made sense.” says Stifel's Paul Massoud.
- The failed deal means there will be “ample cash to be able to return here, and we will do so as expeditiously as possible,” including through possible share buybacks, CF CEO said in a conference call today.
Mon, May 23, 4:58 AM
- Due to a crackdown by the U.S. on so-called tax inversions, CF Industries (NYSE:CF) is calling off an $8B deal to acquire several European and North American operations from OCI (OTCQX:OCINY) of the Netherlands.
- The two said that they were unable to restructure the acquisition, which would have created the world’s largest publicly traded nitrogen company, in a way that would be attractive to their shareholders.
Wed, May 4, 5:35 PM
Tue, May 3, 5:35 PM
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Mon, Apr. 25, 5:03 PM
Tue, Apr. 19, 12:49 PM
- Potash Corp. (POT +4.5%) and Mosaic (MOS +3.1%) are downgraded to Underweight from Equal Weight at Barclays, which says low potash prices along with pressure from new capacity will "substantially limit" earnings prospects for the two companies.
- Barclays thinks potash prices may be reaching a bottom but at a lower level than it had expected, and has grown increasingly concerned that the looming Chinese contract settlement could see a more sizable reduction - approaching $70/ton - on last year's $315/ton price given current pricing across Brazil and southeast Asia and the slow pace of imports into India.
- The firm maintains Overweight rating for Agrium (AGU +3.1%) and CF Industries (CF +5.7%) but slightly lowers its respective price targets to $94 from $96 and to $40 from $43.
- Now read Potash Corp.: More pain ahead as there is no bottom in sight
Thu, Apr. 14, 11:16 AM
- Potash (POT -2.4%), Mosaic (MOS -3.5%), Intrepid Potash (IPI -8.2%) and CF Industries (CF -1.3%) are downgraded to Underperform from Market Perform at Cowen, which cites the risk of a further deterioration in the grain environment and the belief that nutrient prices and margins still have room to fall.
- Cowen expects an increase in U.S. corn acreage to 93.6M acres from 88M acres, plus anticipated gains in Brazilian and Argentine output, to cause a sizeable drop in corn prices and 2017 corn acreage, which would weigh on ag company shares.
- The firm cuts its price targets for POT to $14 from $16, MOS to $23 from $32, and CF to $25 from $44; Agrium (AGU -3.7%) and CVR Partners (UAN -3.2%) are maintained with Market Perform ratings but with reduced price targets of $86 and $8, respectively.
- Now read Potash Corp. credit rating cut at S&P on fertilizer market weakness
Mon, Mar. 28, 2:52 PM
- CF Industries (CF +0.2%) is downgraded to Neutral from Overweight with a $34 price target, cut from $40, at Piper Jaffray, which cites challenges including volatile commodity prices, cyclical business environment, competition and government and environmental regulation.
- The firm believes nutrient pricing will be under pressure following the spring demand season and sees additional risk to pricing through the rest of the year, with increased production coming online in North America.
- Even with the potential opportunity for share buybacks, Piper does not foresee incremental stock buyers if nitrogen fertilizer prices are not going up.
Wed, Mar. 2, 12:49 PM
- Monsanto (MON -7.5%) sinks after cutting its FY 2016 and Q2 profit outlook, citing weak foreign currencies, increased generic competition and compressed grower margins.
- CEO Hugh Grant says MON may not achieve its target of doubling EPS by 2019 because of the current struggles, and that MON is no longer interested in buying Syngenta (SYT -0.9%) after the latter agreed to be acquired by ChemChina.
- Before MON's announcement, the Bernstein research firm called a bottom in the agricultural cycle, which it sees as positive for MON and Potash (POT +3.4%), as spot potash prices are expected to trend positively during the spring planting season.
- Related tickers: DD -1.2%, DOW -0.8%, AGU -1.2%, CF -3.5%.
Thu, Feb. 25, 4:41 PM
- CF Industries (NYSE:CF) rose 4.4% in today's trade after two insiders bought 33K additional shares in the company, valued at more than $1M.
- CEO Anthony Will bought 25K shares in a Feb. 23 transaction at an average price of $32.76/share; following the acquisition, the CEO now owns ~129K CF shares.
- Also, VP Bert Frost bought 8K shares on Feb. 24 at an average price of $31.31.
CF Industries Holdings, Inc. engages in the manufacture and distribution of nitrogen fertilizer products. It owns and operates nitrogen plants and serves agricultural and industrial customers through its distribution system. The company operates through five segments: Ammonia, Granular Urea,... More
Sector: Basic Materials
Industry: Agricultural Chemicals
Country: United States
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