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CF Industries (CF) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, CF Industries (CF) closed at $68.38, marking a +0.86% move from the previous day. This move outpaced the S&P 500's daily loss of 0.54%. At the same time, the Dow lost 0.02%, and the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the fertilizer maker had lost 8.08% in the past month. In that same time, the Basic Materials sector lost 2.26%, while the S&P 500 lost 7.87%.

Investors will be hoping for strength from CF Industries as it approaches its next earnings release. On that day, CF Industries is projected to report earnings of $3.25 per share, which would represent year-over-year growth of 712.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.51 billion, up 127.81% from the year-ago period.

Any recent changes to analyst estimates for CF Industries should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.72% higher. CF Industries currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that CF Industries has a Forward P/E ratio of 5.24 right now. This represents a discount compared to its industry's average Forward P/E of 7.32.

Also, we should mention that CF has a PEG ratio of 0.87. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Fertilizers was holding an average PEG ratio of 0.76 at yesterday's closing price.

The Fertilizers industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 4, putting it in the top 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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