CF Industries Holdings, Inc.’s CF shares hit a fresh 52-week high of $95.72 yesterday, before retracing slightly to close the session at $95.50.

CF stock has rallied 34.9% over the past six months, outperforming the Zacks Fertilizers industry’s 1.3% rise. It has also topped the S&P 500’s roughly 3.9% rise over the same period.

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Let’s take a look into the factors that are driving CF stock.

Healthy Nitrogen Demand, Lower Gas Costs Aid CF Stock

CF Industries benefits from the rising global demand for nitrogen fertilizers, 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.

CF is also gaining 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.

Earnings estimates for CF have also been going up over the past 60 days. The Zacks Consensus Estimate for 2024 has increased by 0.9%. The consensus estimate for 2025 has also been revised 1.3% 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.

CF Industries Holdings, Inc. Price and Consensus

CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote

CF’s Zacks Rank & Other Key Picks

CF currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, ICL Group Ltd ICL and ATI Inc. ATI. While CRS sports a Zacks Rank #1 (Strong Buy), both ICL and ATI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. CRS’ shares have soared 186% in the past year. 

The Zacks Consensus Estimate for ICL Group’s current-year earnings has increased by 8.8% in the past 60 days. ICL beat the consensus estimate in each of the last four quarters with the average surprise being 18.1%. 

ATI beat the consensus estimate in three of the last four quarters while missing once. In this time frame, it has delivered an earnings surprise of roughly 3.7%, on average. ATI has gained around 28% in the past year.

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