CF Industries Holdings, Inc.

CF Industries Holdings, Inc. (NYSE: CF) produces hydrogen and nitrogen products for clean energy, fertilizer, emissions reduction, and other industrial uses. In the United States, Canada, and the United Kingdom, the company operates nitrogen manufacturing complexes. Ammonia, granular urea, UAN, AN, and Others are among the segments. Ammonia, granular urea, urea ammonium nitrate solution (UAN), and ammonium nitrate are the company's main nitrogen products (AN).

Key Highlights

• The company reported YoY growth of 58.54% in net sales to USD 6.54 billion in FY21 (ended December 31, 2021) compared to USD 4.12 billion in FY20.
• CF net income increased to USD 917 million in FY21 vs. USD 317 million in FY20.
• As of December 31, 2021, the company had cash and cash equivalents of USD 1.63 billion and outstanding debt of USD 3.47 billion.
• Its ROE was 29.9% in FY21, whereas the industry median stood at 16.6%.
• On March 21, 2022, CF announced that its wholly-owned subsidiary CF Industries, Inc., has elected to redeem in full all of the USD 500,000,000 outstanding principal amount of its 3.450% Senior Notes due 2023 on April 21, 2022. As per the optional redemption provisions of the indenture governing the Notes, CF intends to fund the redemption with cash on hand.
• Stock is currently trading above its crucial short-term (50-day) and long-term (200-day) SMA support levels, a bullish indicator.
• The stock is leaning towards the lower end of its 52-week range of USD 43.19 to USD 109.80.

Conclusion: Considering the company’s surge in topline, improvement in profitability, technical indicators, and associated risks, we recommend a "Watch" rating on the stock at the closing price of USD 101.01, up 1.23%, as of March 30, 2022.

Technical Price Chart (March 30, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of March 30, 2022

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.

Disclaimer

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