CF Industries is the largest North American producer of nitrogen fertilizer and one of the world's largest ammonia manufacturers. Its core business is converting natural gas (the primary feedstock) into anhydrous ammonia and upgraded nitrogen products — granular urea, UAN and ammonium nitrate — sold mainly to farmers and agricultural distributors, plus industrial buyers of diesel-exhaust fluid, nitric acid and, increasingly, low-carbon ('blue') ammonia. What sets CF apart is a structural cost advantage: its plants run on cheap, abundant North American natural gas (Henry Hub ~$3/MMBtu) while European and much Asian capacity pays multiples of that on TTF-linked gas, so CF sits in the low end of the global nitrogen cost curve and stays highly cash-generative even when nitrogen prices fall. That cost position, a fleet of scaled Gulf-Coast and Midwest plants, and a large clean-ammonia growth option (the Blue Point JV) make it the go-to low-cost nitrogen supplier to the US farm belt. For a reader: think of it as a low-cost commodity manufacturer whose edge is cheap energy and scale rather than product differentiation.
Lifecycle / sector: Mature cash-cow in Materials (nitrogen fertilizer / agricultural inputs). Scored on the Mining/Materials + cash-cow profile — FCF generation, cost-curve position, balance sheet and capital return, not headline net income (which is cyclical and, in 2026, near a peak).
| Sub-signal | Value | Benchmark | Score | Read |
|---|---|---|---|---|
| EBITDA margin (TTM) | 50.1% | sector ~25-35% | 88 | Top-decile margin — the gas-cost advantage in one number. |
| FCF yield (TTM) | ~9% on EV / ~9.5% on price | >8% very attractive | 85 | FCF/share $10.51; heavy cash generation funds buyback + dividend. |
| Balance sheet | Net debt/EBITDA 0.43x; int. cov 16.8x; current 3.5x | <2.0x healthy | 92 | Fortress — survives deep into the price cycle. |
| ROE / ROIC | ROE ~27% (TTM); FMP ROE/ROA score 5/5 | >15% exceptional | 84 | High returns on capital through the cycle. |
| Revenue trajectory | TTM rev ~$7.4B; Q1'26 +19% YoY | price-driven, cyclical | 60 | Revenue tracks nitrogen price — volatile, not a quality signal on its own. |
Commodity price-taker; nitrogen prices set globally. No product pricing power.
Not applicable (neutral).
Fungible product; buyers switch on price/logistics. Some stickiness from distribution/terminal footprint.
The moat. Cheap North American gas + scaled, depreciated plants put CF in the low end of the global nitrogen cost curve — durable and hard to replicate.
Carbon-capture / 45Q optionality and blue-ammonia offtake relationships (JERA/Mitsui) are an emerging, modest intangible.
Moat score = 54–56 (avg). One durable pillar (cost) carrying an otherwise commodity business.
| Rival | Threat type | Share trajectory | Moat-erosion vector |
|---|---|---|---|
| Nutrien (NTR), Yara, Mosaic (MOS) | Direct nitrogen peers | CF stable | Global price competition; none has CF's NA gas-cost edge at scale. |
| OCI / Middle East & new global ammonia capacity | Low-cost exporters + 2026-27 capacity adds | Watch | Adds pressure the nitrogen price (World Bank urea -7% '26 / -9% '27); Hormuz disruption currently offsets by choking ~35% of traded urea. |
| LSB Industries (LXU), imports | Marginal domestic + imports | CF stable | Compete at the US margin; CF's logistics/terminals blunt it. |
Net effect on moat: Cost Advantage held at 88 (gas edge intact); Switching Costs trimmed to 38 and Pricing Power to 42 (fungible commodity). The competitive risk is a price vector → it is carried into the §11 Bear scenario and the §12 thesis-invalidation, not the share-loss vector.
Lens: scored on mid-cycle economics — 2026 headline EPS (~$17) is a cycle peak, so trailing P/E ~9.9x flatters. Anchor on EV/EBITDA and FCF yield normalised toward mid-cycle.
| Multiple | Current | Mid-cycle / ref | Read |
|---|---|---|---|
| EV/EBITDA | 5.0x (TTM) | ~6.5x mid-cycle | Cheap on peak EBITDA; fair-to-cheap mid-cycle. |
| P/E | 9.9x (peak EPS) | ~12x mid-cycle (EPS ~$9-11) | Optically cheap; fair once earnings normalise. |
| P/B | 3.19x | 1.5-2.5x typical | Elevated — but justified by ~27% ROE. |
| FCF yield | ~9% | >8% very attractive | The strongest valuation leg — real cash return. |
| Shareholder yield | ~8.5% (buyback + div) | — | Buyback shrinks the share count — part of the thesis. |
Primary driver: the realised nitrogen (ammonia/urea/UAN) price versus CF's natural-gas feedstock cost. CF's structural edge is cheap North American gas — the spread, not the absolute nitrogen price, drives its margin.
| Horizon | Read | Data (dated) |
|---|---|---|
| Historical (25%) | Softening off peak | Urea -17.6% MoM, -12.6% YoY (DTN, 1 Jul 2026); prices came down from the spring-2026 peak. |
| Current (50%) | Margin still wide; supply floor | Henry Hub ~$3.3/MMBtu vs TTF ~$16/MMBtu (Jun 2026) — CF's ~5x cost edge intact. Iran/Strait-of-Hormuz disruption chokes ~35% of traded urea, providing a price floor. |
| Forward (25%) | Mild downtrend + optionality | World Bank: urea -7% (2026), -9% (2027) as new capacity lands; offset by Blue Point/blue-ammonia demand growth. |
Driver score 64 — Neutral band (just below the 65 tailwind line). The structural gas-spread edge is a genuine tailwind, but nitrogen prices are actively falling right now, pulling the current-state component under the amplification threshold. Not amplification-eligible — so the medium/long base BUY is not lifted to STRONG BUY despite the supportive economy. Confidence 62 (commodity forecast volatility; Hormuz situation fluid).
Latest MacroDriver (26 Jun 2026) scores Materials XLB N (short) / O (medium) / SO (long). Anchoring on the medium horizon → Tailwind; short is Neutral. CF is a Basic-Materials name, though as an ag-fertilizer producer it is only partly captured by XLB (ag/DBA demand also relevant), so weight is moderate. Stance Trend-Following (going long rides the improving materials tape); conviction 63. Note: this Tailwind did NOT enable amplification — the co-condition (Underlying Driver ≥ 65) is not met (driver 64), so medium/long stay BUY rather than STRONG BUY.
Source: sector-map (XLB Materials; ag-fertilizer caveat) · Macro report 2026-06-26
Risk-reward: price $110.54 is above the rising 200-day (~$99.7) but below the 50-day (~$116). It bounced from the ~$101 support cluster (17-23 Jun) and has printed higher lows into $110.5, MACD histogram turning up (+1.0). Nearest logical stop below ~$98 is ~$12 / ~2.6 ATR away (ATR ~$4) — a moderate, slightly-wide stop. Resistance at the 50-day $116 then $120 caps near-term upside → balanced risk-reward.
| Sub-signal | Read | Score |
|---|---|---|
| MTF confluence | Tool: 'strongly bullish' (monthly/weekly uptrend, hourly/15-min strong uptrend) but daily still 'weakening' below the 50-day — a recovery, not a confirmed breakout. | 60 |
| Risk-reward / position-risk | Above 200-day, below 50-day; ~2.6 ATR to stop. | 50 |
| Relative strength | 52-wk range position ~53% (mid-range); off the March $142 high. | 52 |
| Macro overlay (Materials, weight 0.20) | Fed on hold; XLB improving medium/long; soft Jun payrolls (57k) mixed. | 55 |
| Sentiment | Scotiabank upgrade (30 Jun); otherwise 'maintain'; Buy consensus, 51% bullish. | 58 |
| Catalyst density | Calm — no earnings in 30 days; Q2 early Aug. | 66 |
Net timing 54 (neutral). Constructive recovery, but a below-50-day tape and a not-yet-reclaimed downtrend keep it out of 'improving' — hence the Short signal is HOLD.
| Date | Event | Impact | Forecast | Previous | Relevant? | Why |
|---|---|---|---|---|---|---|
| 2026-07-06 | ISM Services PMI (Jun) | High | 54.0 | 54.5 | ⚠ Medium | Materials demand read-through |
| 2026-07-08 | FOMC Minutes | High | — | — | ⚠ Medium | Rate path — growth-stock/materials valuation |
| 2026-07-14 | CPI YoY (Jun) | High | 3.9% | 4.2% | ✅ Yes | Inflation/rate path; input-cost & ag inflation |
| 2026-07-15 | PPI MoM (Jun) | High | 0.8% | 1.1% | ✅ Yes | Producer prices — fertilizer input & output |
| 2026-07-16 | Retail Sales MoM (Jun) | High | 0.3% | 0.9% | ⚠ Medium | Demand tape |
| Date | Event | Actual | Forecast | Surprise | Impact |
|---|---|---|---|---|---|
| 2026-07-02 | Non-Farm Payrolls (Jun) | 57K | 110K | -48% | Soft — dovish tilt, mild risk-on for materials |
| 2026-07-01 | ISM Manufacturing PMI (Jun) | 53.3 | 54.0 | -1.3% | Slightly soft — mild negative for Materials demand |
| 2026-06-25 | GDP QoQ (Q1) | 2.1% | 1.6% | +31% | Above — supportive of industrial/ag demand |
| 2026-06-25 | Core PCE MoM (May) | 0.3% | 0.3% | 0% | Inline — neutral |
No CF-specific dated catalyst in the next 14 days. The relevant macro reads for a Materials/ag name are ISM manufacturing (came in slightly soft at 53.3) and CPI/PPI on 14-15 Jul (inflation & producer-price trend). CPI on 14 Jul is 12 days out — outside the 3-day Materials WAIT-override window — so it does not gate the short-term signal but is the next macro checkpoint. Soft June payrolls (57k) lean mildly dovish/risk-on.
| Timeframe | Trend | Direction | RSI | MACD | Key S/R | Breakout | Vol |
|---|---|---|---|---|---|---|---|
| Monthly | Uptrend | Bullish | 58.7 | +, rising | S: 75.4 R: 112.4 / 142 | Res. breakout | 0.1x |
| Weekly | Uptrend | Bullish | 51.5 | +, hist - | S: 109.7 R: 130 / 142 | None | 0.5x |
| Daily | Weakening | Neutral | 46.4 | -, hist turning up | S: 100.7 / 101.5 R: 116(50d) / 130 | Below 50-day | 0.9x |
| Hourly | Strong Up | Bullish | 65.8 | + | S: 107.5 R: 111.8 | Res. breakout | — |
| 15-min | Strong Up | Bullish | 61.6 | + | S: 108.9 R: 111.8 | Res. breakout | — |
| Confluence: Mostly Bullish (recovery) · MTF Score 62 | |||||||
Higher timeframes (monthly/weekly) are in uptrends and intraday is strongly bid, but the daily remains below its 50-day (~$116) in a 'weakening' structure recovering off the $101 support cluster. This is the classic 'higher-TF uptrend + daily pullback recovering' setup — constructive, but the daily has not yet reclaimed the 50-day, so it is a recovery rather than a confirmed breakout. Key level: a daily close back above ~$116 on volume would flip the Technical entry group to met.
CF daily close (Jan–Jul 2026) with 50-day SMA. Price recovered off the ~$101 support cluster and the rising 200-day, now testing back toward the falling 50-day (~$116). Real 6-month daily closes; SMA50 computed from the continuous series.
Nitrogen re-tightens (sustained Hormuz/Middle-East supply disruption + firm demand), the gas-cost spread stays wide, and Blue Point de-risks. Multiple re-rates toward the $145 analyst high on higher mid-cycle EBITDA. Trigger: urea reverses higher and the daily reclaims $116–$120.
Nitrogen prices drift modestly lower (World Bank -7% '26) but CF's gas advantage keeps FCF ~9%; buyback shrinks the share count. Fair value on ~6.5x mid-cycle EV/EBITDA + ~$115 SOTP; converges toward consensus/median ($112.5–$114) plus optionality.
A wave of new global ammonia capacity (2026-27) plus a soft demand year drives nitrogen prices down faster than expected; the Hormuz supply floor lifts and the war premium unwinds. Competitive/price vector (see §3) compresses margins. Retests the 200-day and the $75-$88 range low.
Forecast: Fundamental group is MET now (cheap + driver ≥ 50). Technical group ~1–2 weeks IF the daily reclaims the 50-day (~$116, ~5% above spot) on volume — Moderate confidence: higher-TF trend and turning MACD support it, but a stall/pullback resets the clock. Catalyst group is event-dependent on Q2 earnings (~early Aug): a >+5% beat-and-raise would open it. Ladder currently reads Half-Size (1 of 3 — Fundamental only).
Forecast: Stop-loss unlikely in the next 4–6 weeks — price ~$110.5 is ~11% above the $98 stop and above the rising 200-day; would need a nitrogen-price break or broad selloff. Thesis-invalidation not live (driver soft but not a headwind; guidance intact). Profit-trim ~$118 is ~7% up and would need RSI to run hot — possible on a fast reclaim, otherwise weeks out.
What you're risking: a fall to the ~$98 stop (≈ -11%) or the ~$90 bear (≈ -18%) if nitrogen keeps sliding and the Hormuz floor lifts; you'd be buying below the 50-day (the Technical entry group is NOT yet met) so you're pre-empting a confirmed trend reclaim.
What you're gaining: the base path to ~$118 (≈ +7%) and bull to ~$140 (≈ +27%) you start capturing now; ~9% FCF yield + ~1.9% dividend + ~8.5% shareholder yield compounding via buyback; and the un-priced clean-ammonia platform. Risk-reward ≈ 1 : 1.6 to base-plus.
Read: a starter (Half-Size) here is reasonable given the fundamentals; waiting for a daily reclaim of $116 improves the entry quality and would justify scaling up.
What you're giving up: base upside to ~$118 and the free clean-ammonia optionality; you'd be selling roughly at fair value/consensus, not above it.
What you're protecting: capital if the bear case (new capacity + demand slump) plays out toward ~$90. But note: no exit rule is live — stop, thesis-invalidation and profit-target are all clear.
Read: no mechanical reason to sell; this is a hold/accumulate zone, not an exit.
{
"ticker": "CF",
"exchange_ticker": "NYSE:CF",
"isin": "US1252691001",
"company": "CF Industries Holdings, Inc.",
"date": "2026-07-02",
"version": "v6",
"analysis_status": "on-going",
"finder_ticker": "CF",
"finder_exchange": "\ud83c\uddfa\ud83c\uddf8 NYSE",
"section": "Agriculture & Fertilizer",
"lifecycle_stage": "mature_cash_cow",
"user_horizon": null,
"user_allocation_pct": null,
"portfolio_role": null,
"price_at_rating": 110.54,
"currency": "USD",
"signal_short": "HOLD",
"signal_medium": "BUY",
"signal_long": "BUY",
"primary_signal": "BUY",
"composite_short": 60,
"composite_medium": 65,
"composite_long": 70,
"quality_score": 80,
"valuation_score": 64,
"timing_score": 54,
"quality_detail": {
"industry_benchmark_name": "nitrogen price vs natural-gas cost margin",
"industry_benchmark_value": "HH ~$3.3 vs TTF ~$16/MMBtu; urea -17.6% MoM",
"industry_benchmark_score": 80,
"moat_score": 56,
"roic_percentile_vs_peers": 84,
"capital_allocation": 84,
"management_skin_in_game": 62
},
"valuation_detail": {
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"ev_ebitda_ttm": 5.0,
"ev_ebitda_midcycle": 6.5,
"trailing_pe": 9.9,
"pe_midcycle": 12.0,
"pb": 3.19,
"implied_growth_rate": 2.0,
"consensus_growth_rate": 4.0,
"historical_valuation_decile": 5,
"shareholder_yield_pct": 8.5,
"optionality_tilt": 4
},
"timing_detail": {
"mtf_confluence": 62,
"risk_reward_score": 50,
"relative_strength_vs_spy": 0.0,
"relative_strength_vs_sector": 0.0,
"rel_strength_52w_pct": 53,
"catalyst_clustering_score": 66,
"dynamic_macro_weight": 0.2,
"daily_rsi": 46.4,
"weekly_rsi": 51.5,
"monthly_rsi": 58.7,
"beta": 0.38,
"atr_daily": 4.0
},
"nonop_pct_of_net_income": 10,
"clean_pe": 12.0,
"clean_peg": 1.3,
"competitive_share_trajectory": "stable",
"competitive_threat_level": "moderate",
"driver_score": 64,
"driver_label": "Neutral (fading tailwind)",
"economic_alignment_stance": "Trend-Following",
"economic_alignment_conviction": 63,
"economic_alignment_pressure": "Tailwind",
"economic_alignment_source": "sector-map (XLB Materials; ag caveat)",
"macro_report_date": "2026-06-26",
"overall_confidence": 60,
"fair_value_est": 116,
"stop_loss": 98,
"target_price": 118,
"scenario_base_target": 118,
"scenario_bull_target": 140,
"scenario_bear_target": 90,
"analyst_consensus_target": 112.5,
"analyst_target_high": 145,
"analyst_target_low": 72,
"analyst_target_median": 114,
"analyst_target_upside_pct": 1.8,
"analyst_grades_consensus": "Buy",
"analyst_bullish_pct": 51,
"analyst_coverage_count": 41,
"recent_upgrades_30d": 1,
"recent_downgrades_30d": 0,
"fmp_rating": "A-",
"fmp_overall_score": 4,
"hard_gate_state": "clear",
"gates_triggered": [],
"gates_caution": [],
"do_not_buy_triggers": [],
"entry_groups_met": 1,
"entry_conviction": "Half-Size",
"exit_groups_live": 0,
"exit_action": "Hold",
"next_update_date": "2026-07-16",
"next_update_basis": "default +14d (no impactful dated catalyst; Q2 earnings ~early Aug beyond window)",
"prior": {
"date": "2026-06-18",
"signal_short": "HOLD",
"signal_medium": "BUY",
"signal_long": "BUY",
"quality": 80,
"valuation": 66,
"timing": 52,
"driver": 67,
"economic_pressure": "Neutral",
"price": 102.93
}
}