CF Industries (CF): Reassessing Valuation After a Recent Pullback in Share Price

CF Industries Holdings (CF) has been grinding lower recently, with the stock down around 12 % over the past 3 months and about 13 % over the past year, despite still solid long term returns.

See our latest analysis for CF Industries Holdings.

That recent slide, including an 8.2 % 30 day share price return and double digit year to date weakness, signals fading momentum in the near term. Even though the five year total shareholder return above 100 % still underscores substantial long run wealth creation.

If CF Industries price action has you reassessing your options, this could be a good moment to explore fast growing stocks with high insider ownership as potential next wave candidates.

With earnings under pressure but the share price already off its highs and trading below the average analyst target, the key question now is simple: is CF Industries undervalued or is the market already pricing in its future growth?

Most Popular Narrative: 17.4% Undervalued

Compared to CF Industries last close of $76.09, the most followed narrative sees fair value closer to $92, implying meaningful upside if its projections hold.

The tight global nitrogen supply demand balance, currently driven by chronic supply side constraints and geopolitical disruptions, is at risk as new capacity from China and other regions and policy changes could lead to overcapacity. This could put downward pressure on nitrogen pricing, revenue, and net margins in the coming years. While carbon capture and blue/green ammonia projects are expected to deliver incremental EBITDA from tax credits and product premiums, heavy reliance on government incentives and early stage clean ammonia markets introduces long term regulatory and adoption risks, which may threaten the stability of projected future cash flows and margins.

Read the complete narrative.

Want to see how flat revenues, slimmer margins, and a higher future earnings multiple still add up to upside from here? The full narrative reveals the math.

Result: Fair Value of $92.17 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent global food demand and CF’s low cost, low carbon leadership could sustain fertilizer pricing and margins for longer than current cautious assumptions suggest.

Find out about the key risks to this CF Industries Holdings narrative.

Another Lens on Value

While the narrative points to a fair value near $92, our SWS DCF model paints a cooler picture, with CF trading above its estimated intrinsic value. That gap hints the market may already be baking in more growth than the cash flows support. Which story do you trust?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CF Industries Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 909 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CF Industries Holdings Narrative

If you see CF’s story differently or want to dig into the numbers yourself, you can build a custom narrative in just minutes, Do it your way.

A great starting point for your CF Industries Holdings research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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