UPDATE: Citi Upgrades CF Industries (CF) to Buy

Citi analyst P.J. Juvekar upgraded CF Industries (NYSE: CF) from Neutral to Buy with a price target of $117.00 (from $99.00).

The analyst comments "Our three takeaways from CF’s earnings call: 1) The company again highlighted the ongoing need to replenish low global grain stocks, which should help underpin strong demand for nitrogen fertilizers. With forward gas curves elevated in Europe and Asia, CF should maintain a substantial advantage as a low-cost producer. 2) TTF NG prices above $60/mmbtu put marginal ammonia production costs above $2,000/t for efficient plants, making production unsustainable and leading to curtailments. These curtailments coupled with continued restrictions on China exports should continue to tighten supply in the face of resilient ag demand. The company has reacted by limiting their UAN fill program and building their largest export book across all products, as the company looks to take advantage the highest margin opportunities between products and regions. 3) On capital allocation, the company expects to make progress toward its $1.5 bn repurchase program ($590 mm in 1H22) with the ratable portion at $175 mm a quarter and additional opportunistic purchases. The company expects to hold additional cash on the balance sheet in the coming years to fund Donaldsonville projects and the Mitsui JV project."

For an analyst ratings summary and ratings history on CF Industries click here. For more ratings news on CF Industries click here.

Shares of CF Industries closed at $98.17 yesterday.

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