CF Industries Holdings, Inc. (NYSE:CF) Analysts Just Slashed This Year's Revenue Estimates By 15%

Today is shaping up negative for CF Industries Holdings, Inc. (NYSE:CF) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from CF Industries Holdings' 13 analysts is for revenues of US$7.9b in 2023, which would reflect a substantial 29% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to crater 24% to US$12.94 in the same period. Before this latest update, the analysts had been forecasting revenues of US$9.3b and earnings per share (EPS) of US$14.61 in 2023. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

See our latest analysis for CF Industries Holdings

Analysts made no major changes to their price target of US$108, suggesting the downgrades are not expected to have a long-term impact on CF Industries Holdings' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on CF Industries Holdings, with the most bullish analyst valuing it at US$132 and the most bearish at US$75.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 29% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CF Industries Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of CF Industries Holdings going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple CF Industries Holdings analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.