Morningstar Rating

Stock Research and Analysis

by Jeffrey Stafford, CFA

Bulls Say

High shipping and storage costs for importers of nitrogen fertilizer limit the amount of competition CF faces in North American markets from regions with lower natural gas costs.
Crop economics currently favor planting corn over soybeans and wheat on a net return basis. Fertilizer expenses are much higher for corn than for beans and wheat.
Access to pipelines connecting the company's nitrogen facilities in Louisiana and Oklahoma to the Midwest gives CF a transportation cost advantage. Read more 

Bears Say

North American natural gas prices are highly volatile, and we expect an increase in gas costs for CF in the coming years.
In nitrogen and phosphate, CF competes with many companies that are state-owned or government-subsidized. Government controlled firms are more likely to produce quantities in excess of demand, disrupting supply/demand balances.
As the world's largest consumer of fertilizers, China is expected to expand its fertilizer production capacity, an outcome that could put downward pressure on fertilizer prices. Read more 

Management

Tony Will replaced Steve Wilson as CEO in early 2014. Will was previously the firm's vice president of manufacturing and distribution, having joined CF in 2007 with a prior background in management consulting. He played a major role in the firm's acquisition   Read more 

Profile

CF Industries is a leading producer and distributor of nitrogen and phosphate fertilizers. The company operates seven nitrogen facilities in North America and holds joint   Read more 

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