What Makes CF Industries Stock a Solid Investment Option Now?

CF Industries Holdings, Inc.’s CF shares have popped 13.9% over the past three months, outperforming the Zacks Fertilizers industry’s rise of 6.2%. It is well-positioned to benefit from higher nitrogen fertilizer demand in major markets, an uptick in nitrogen prices and lower natural gas costs.We are positive about CF’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.Let's see what makes CF stock an attractive investment option at the moment.  Image Source: Zacks Investment ResearchCF’s Earnings Estimates Moving UpEarnings estimates for CF have been going up over the past 60 days. The Zacks Consensus Estimate for 2024 has increased by 5.7%. The consensus estimate for 2025 has also been revised 2.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Superior Return on Equity (ROE) for CF StockROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for CF Industries is 14.6%, above the industry’s level of 8.1%.CF’s Stock Valuation Looks AttractiveCF’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential. Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value fertilizer stocks, CF is currently trading at a trailing 12-month EV/EBITDA multiple of 6.99, cheaper compared with the industry average of 10.79.Healthy Demand, Higher Prices & Lower Gas Costs Aid CFCF Industries is benefiting from the rising global demand for nitrogen fertilizers, which is driven by significant agricultural demand. Industrial demand for nitrogen has also recovered from the pandemic-related disruptions. Global demand is expected to remain strong in the near future due to recovering industrial demand and farmer economics. High levels of corn planted acres and low nitrogen channel inventories are expected to drive demand for nitrogen in North America. Demand for urea is also likely to remain strong in Brazil on higher corn acres. Demand in India is expected to be driven by favorable weather conditions for crop production.Strong global nitrogen demand and reduced supply availability supported global nitrogen prices in the third quarter of 2024. CF, on its third-quarter call, said that it anticipates the global supply-demand balance to remain constructive, as inventories are believed to be below average globally while energy spreads remain significant between North America and high-cost production in Europe.The company also stands to benefit from lower natural gas prices. It saw a decline in natural gas costs in the third quarter. The average cost of natural gas fell to $2.10 per MMBtu in the quarter from $2.54 per MMBtu in the year-ago quarter. The benefits of reduced gas costs are expected to continue in the fourth quarter.Higher nitrogen prices are also expected to support the company’s top line. Per CF Industries, nitrogen prices globally were aided in the third quarter by strong global nitrogen demand and reduced supply availability due to natural gas shortages in Trinidad and Egypt, the absence of China from the urea export market and planned maintenance activities in the Middle East. CF gained from higher year over year average selling prices in the third quarter due to increased average selling prices for ammonia from lower global supply availability.CF Industries Holdings, Inc. Price and Consensus CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. QuoteCF’s Zacks Rank & Other Key PicksCF currently sports a Zacks Rank #1 (Strong Buy).Other top-ranked stocks in the Basic Materials space are Methanex Corporation MEOH, Axalta Coating Systems Ltd. AXTA and DuPont de Nemours, Inc. DD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Methanex’s current-year earnings has increased by 20.7% in the past 60 days. MEOH beat the consensus estimate in each of the last four quarters with the average surprise being 101%. Its shares have gained roughly 4% in the past year.The Zacks Consensus Estimate for Axalta Coating’s current year earnings is pegged at $2.15, indicating a rise of 36.9% from year-ago levels. The Zacks Consensus Estimate for AXTA’s current year earnings has increased 3.9% in the past 60 days. The stock has rallied around 18% in the past year. DuPont beat the consensus estimate in each of the last four quartersin with the average earnings surprise being 12.9%. DD’s shares have gained roughly 14% in the past year.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DuPont de Nemours, Inc. (DD): Free Stock Analysis Report CF Industries Holdings, Inc. (CF): Free Stock Analysis Report Methanex Corporation (MEOH): Free Stock Analysis Report Axalta Coating Systems Ltd. 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