CF - Embedded Expectations Analysis - 2019 04 24
CF Industries Holdings, Inc. (CF:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 33.4x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about Indian urea demand, declines in ammonia sales, and European production costs.Specifically, management may be concerned about volatility in urea purchase volume in India, caused by spot tonnage and the tender market, and may exaggerating the strength of demand in the region. Moreover, they may lack confidence in their ability to create long-term shareholder value and sustain share buybacks, serve the needs of farm and retail centers, and capitalize on UAN growth opportunities. Furthermore, they may be concerned about declines in ammonia sales, European production costs, and their ability to utilize NOL carry forwards.
CF Industries Holdings is a global fertilizer and chemical company. The company's principal nitrogen fertilizer products are anhydrous ammonia, granular urea, urea ammonium nitrate solution and ammonium nitrate. The company's other nitrogen products include diesel exhaust fluid, urea liquor, nitric acid and aqua ammonia, which are sold primarily to its industrial customers, and compound fertilizer products, which are solid granular fertilizer products for which the nutrient content is a combination of nitrogen, phosphorus, and potassium. The company serves its customers in North America through its production, storage, transportation and distribution network.
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