Evaluating CF Industries (CF) Valuation as Low-Carbon Ammonia Milestone Showcases Progress in Sustainable Fertilizer Production

CF Industries Holdings (CF) just completed a milestone shipment of certified low-carbon ammonia to Europe, made possible by its new carbon dioxide capture and storage project. This move highlights the company’s expanding role in sustainable fertilizer production.

See our latest analysis for CF Industries Holdings.

The news of CF Industries’ first certified low-carbon ammonia shipment comes at a time of renewed momentum for the stock, which recently rebounded 3.95% in a single day after a brief losing streak and announced another steady $0.50 per share quarterly dividend. While short-term share price movements have been mixed, the five-year total shareholder return of over 220% highlights CF Industries Holdings’ longer-term resilience and potential. This is particularly relevant as the market takes notice of the company’s sustainability initiatives and upcoming leadership transition.

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But with shares hovering just below analyst price targets and mixed signals on recent earnings growth, investors may wonder whether CF Industries is weathering a temporary slump or if expectations for future growth are already reflected in the current price.

Most Popular Narrative: 3.7% Undervalued

With the last close price of $90.09 and a narrative fair value of $93.56, CF Industries is viewed as trading at a small discount. This setup reflects a nuanced balance of near-term momentum and long-term skepticism among the analyst community.

Substantial capital allocation to shareholder returns, $2 billion in buybacks over 12 months and an additional $2.4 billion authorized, has inflated EPS and ROE, potentially causing investors to overvalue shares based on recent financial engineering rather than sustainable operating profit trends.

Read the complete narrative.

Ever wondered what’s fueling this premium? The answer hinges on bold earnings projections, margin shifts, and a controversial outlook for industry demand. Dig into the full narrative for the surprising assumptions that underpin this apparent value. What you find might challenge your expectations.

Result: Fair Value of $93.56 (UNDERVALUED)

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

However, sustained global food demand and CF’s early moves into low-carbon ammonia could fuel lasting pricing power and support future earnings resilience.

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

Another View: Comparing Ratios

Aside from fair value estimates, CF’s price-to-earnings ratio stands at 11.2x, which is noticeably lower than both the US Chemicals industry average of 26.3x and the broader peer average of 23.5x. This is also below the market’s "fair ratio" of 15.3x, suggesting the stock may be undervalued by comparison to its group. Could this pricing gap signal a real opportunity, or does it simply reflect investor skepticism?

See what the numbers say about this price — find out in our valuation breakdown.

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 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

Not convinced by the current outlook, or interested in digging deeper on your own? You have everything you need to build a personal narrative in minutes, so why not Do it your way

A great starting point for your CF Industries Holdings research is our analysis highlighting 4 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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