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Stifel cuts CF Industries target to $73 from $81, keeps hold rating

EditorBrando Bricchi
Published 05/13/2024, 01:29 PM

On Monday, Stifel, a financial services company, adjusted its price target for CF Industries (NYSE:CF), a leading fertilizer company, to $73.00, down from the previous target of $81.00. Despite the reduction, the firm maintained a Hold rating on the stock.

The revision follows CF Industries' first quarter earnings call and an updated price deck. Stifel noted that the majority of changes to their estimates are due to modifications in their price deck, particularly with urea prices being lowered to match the current market rates. This was somewhat balanced by better-than-expected ammonia pricing.

CF Industries' first-quarter performance was affected by weather-related plant outages. However, the company took proactive steps by advancing maintenance activities. According to Stifel, these measures should put CF Industries in a better position to meet the anticipated higher demand for side-dress applications, especially since imports of UAN (urea ammonium nitrate) and AN (ammonium nitrate) from Russia are limited.

The downgrade in the price target to $73 is attributed to a decrease in the forecasted earnings for 2024 and the subsequent effect on the company's cash flow and balance sheet for the year. Despite these adjustments, Stifel's Hold rating indicates a neutral stance on the stock's near-term prospects.

InvestingPro Insights

In light of Stifel's recent price target adjustment for CF Industries, current InvestingPro data offers additional context for investors. CF Industries holds a market capitalization of $13.56 billion and presents a P/E ratio of 12.25, which adjusts to 11.66 for the last twelve months as of Q1 2024. This suggests a relatively modest valuation in the industry. Additionally, the company's dividend yield stands at 2.7%, reflecting a commitment to returning value to shareholders, as evidenced by its 20-year history of maintained dividend payments, an InvestingPro Tip worth noting.

The company's strong free cash flow yield, another InvestingPro Tip, indicates that it has the financial flexibility to support its operations and shareholder returns. Despite a significant revenue decline of 41.06% over the last twelve months as of Q1 2024, the firm has managed to maintain a gross profit margin of 34.34% and an operating income margin of 28.74%, showing efficiency in its operations.

For investors seeking more in-depth analysis, InvestingPro offers an additional 11 tips on CF Industries, which can be accessed through their platform. Moreover, using the coupon code PRONEWS24 will secure an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more value for those looking to make informed investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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