CF INDUSTRIES HOLDINGS, INC. (CF): what the price requires
The current priced-in claim for CF INDUSTRIES HOLDINGS, INC. (CF) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CF
Headline
| Field | Value |
|---|---|
| Ticker | CF |
| Company | CF INDUSTRIES HOLDINGS, INC. |
| Current price | $121.41/sh |
| Composition | Ammonia 31% / Granular Urea 25% / UAN 31% / AN 6% / Other 8% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 6.3% |
| Operating margin today | 35.4% |
| Margin compression implied | -29.1pp |
| Multiple paid | 9x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.53σ |
| cohort percentile (of 76 peers) | 11 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.82x | 5 | justifies |
| Earnings | 0.77x | 4 | justifies |
| Relative | 0.67x | 5 | justifies |
| Growth | 0.38x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.9%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $935.05 | 0.13x | yes | FCF base $2.8B, growth 21% (input: historical growth), terminal g 4.0%, WACC 7.9%, 6yr projection |
| DCF Exit Multiple | Growth | $321.46 | 0.38x | yes | Exit EV/EBITDA: 5.5x / 7.5x / 9.5x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $181.17 | 0.67x | yes | P/E 14x (static sector reference · 2026-04), scenarios: 11.4x / 14.0x / 16.6x (bear / base = reference held flat / bull), EV/EBITDA 8x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $148.55 | 0.82x | yes | BV/sh $34.58, ROE (TTM) 39.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $341.54 | 0.36x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $181.70 | 0.67x | yes | Rev $7.4B, growth 21% (input: historical growth; tapered), Terminal P/S: 2.1x / 2.5x / 3.0x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $388.50 | 0.31x | yes | EPS $11.10, growth 35% (input: historical EPS growth), PEG=0.25 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $226.12 | 0.54x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.97B × (1−20%) / WACC 7.9% → EPV (no growth) |
| Residual Income | Asset | $235.04 | 0.52x | yes | BV $34.58 + 5yr PV of (ROE (TTM) 39.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $92.93 | 1.31x | yes | √(22.5 × EPS $11.10 × BVPS $34.58) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $131.48 | 0.92x | yes | EBITDA $2.94B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $92.88 | 1.31x | yes | FCF $1621.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $358.16 | 0.34x | yes | EPS $11.10 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $35.50 | 3.42x | yes | BV $34.58 × (ROIC 8.1% / WACC 7.9%) |
| P/Sales Sector | Relative | $71.91 | 1.69x | yes | Revenue $7.41B × sector P/S 1.5x |
| PEG Fair Value | Relative | $416.25 | 0.29x | yes | EPS $11.10 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $120.00 | 1.01x | yes | EPS $11.10 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $3.2b |
| Net debt / NOPAT (after-tax) | 1.58x |
| Net debt / operating income (pre-tax) | 1.26x |
| Interest coverage | 16.6x |
| Share count CAGR (buyback) | -7.4% |
| Burning cash | no |
Bullet Takeaways
At $102.99 the price pays about 8x company-wide operating income, low enough that it sits below what even a 5% per year decline in operating profit would warrant. The market is pricing CF as a business in mild decline, not growth.
The earnings are running hot on tight nitrogen markets. Q1 2026 net earnings reached $615 million with EPS of $3.98 against a $2.50 estimate, and adjusted EBITDA nearly doubled year over year, driven by higher selling prices amid constrained global supply.
The whole question is whether nitrogen margins normalize down, and how much of today's cash the buyback returns before they do.
Bull Case
The earnings trajectory is the heart of the bull case, and it is pointed sharply up. CF Industries posted Q1 2026 net earnings of $615 million and diluted EPS of $3.98, crushing the $2.50 estimate, with adjusted EBITDA of $983 million, nearly double the year-ago level, on net sales up 19% to $1.99 billion. The driver is a global nitrogen market that is genuinely tight: higher average selling prices across every product segment, with supply constrained by conflict-related disruptions, export restrictions, and outages in key producing regions, while demand, led by India, stays firm. As the lowest-cost large-scale North American nitrogen producer, CF runs on cheap U.S. natural gas and sells into a global price, so when the global price rises, the spread, and the cash, expand dramatically.
The second leg is the structural cost advantage and the optionality on top of it. CF produces ammonia, granular urea, UAN, and ammonium nitrate, and the 10-K notes products derived from ammonia sold to industrial customers including 'diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia,' diversifying beyond pure fertilizer (FY2025 10-K, accession 0001324404-26-000007). On top of the core franchise, the company is building the Blue Point low-carbon ammonia joint venture with JERA and Mitsui, where the filing states 'our decarbonization projects provide us with' a position in growing low-carbon ammonia demand, with site infrastructure underway and civil construction due to begin later in 2026. That is a call option on the energy-transition demand for clean ammonia, funded by a partner-shared structure.
The third leg is capital returns at a cheap price, which is the cleanest way a cyclical compounds value. CF returned $1.3 billion to shareholders in the period and has $1.7 billion remaining under a $2 billion repurchase authorization, all while the stock trades at roughly 8x operating income. Buying back stock at a single-digit multiple of peak-cycle cash flow shrinks the share count meaningfully, so even a flat enterprise value translates into rising per-share value. Interest coverage near 17x and net debt of only about 1x operating income mean the balance sheet is not a constraint. For a buyer who sees nitrogen staying tight, the combination of surging cash, a low multiple, and an aggressive buyback is the textbook setup for a cyclical at the right point.
Bear Case
The capital-allocation question is where a cyclical at a high gets dangerous, because the temptation is to deploy peak cash at peak prices. CF is returning $1.3 billion to shareholders and buying back stock aggressively, which looks great while earnings are near a high, but the discipline that matters is whether management is repurchasing shares because they are cheap on normalized earnings or merely cheap on peak earnings. At 8x operating income the multiple looks low, but the operating income is inflated by a nitrogen price spike tied partly to the conflict with Iran and other supply disruptions. If those disruptions ease and prices revert, the same buyback will have been executed at a price that only looked cheap, and the cash spent will not come back. The other large allocation, the Blue Point low-carbon ammonia complex, is a multi-year capital commitment, and the 10-K explicitly flags the risk that the company may be unable 'to fund the capital expenditure needs related to the joint venture at our Blue Point complex, which may exceed our current estimates.' A big greenfield build into a demand market (low-carbon ammonia) that is still nascent is exactly the kind of cycle-top capital decision that destroys value if the demand is slower or smaller than hoped.
The second risk is the one the company names itself: 'the cyclical nature of our' business (FY2025 10-K, accession 0001324404-26-000007). Nitrogen prices are set globally and CF controls none of them. The current strength rests on temporary supply outages and geopolitical disruption; when new capacity comes online or conflicts resolve, the global price can fall hard, and CF's margins, currently 36.6%, would compress quickly. The high fair-value figures the models produce all rest on capitalizing today's elevated earnings, which is precisely the trap with a cyclical: a method that says fair value is multiples of the price is really saying the price assumes a sharp reversion, and the methods are extrapolating a peak.
The third issue is input and policy exposure. CF's cost advantage is cheap North American natural gas, so a sustained rise in U.S. gas prices would erode the spread that makes the model work. Fertilizer is also politically sensitive, exposed to export restrictions, tariffs, and farm-economics swings that move demand. The DEF and industrial products diversify the end markets somewhat, but the core remains a commodity sold into a volatile global market. At a price that sits below what a 5% decline would warrant, the bound is reassuring only if the starting earnings base is sustainable. If this is a peak, then the cheap multiple is appropriate, and the aggressive return of capital is the company harvesting a cycle rather than compounding through one.
Valuation
CF is a cyclical trading at a cheap multiple of strong earnings, and the valuation has to be read with that tension front of mind. At about 8x company-wide operating income the price sits below what even a 5% per year decline in operating profit would warrant, computed at a 7.9% cost of capital with 4% terminal growth. That is a bound, not a solved growth rate: the market is not asking CF to grow, it is pricing in mild decline, which is a rational stance toward a commodity producer whose earnings are near a high.
Every valuation family lands above the price, which is what makes the name interesting and also what demands caution. The relative-multiple methods land near $131 to $181, the earnings-power methods near $93 to $228, the asset and excess-return methods range from about $36 (ROIC-justified P/B) up to $341 (two-stage excess return), and the growth-DCF methods reach into the hundreds because they capitalize current cash flows forward. The honest interpretation is not that CF is worth $320; it is that on current, elevated earnings the standard methods all say the stock is cheap, and the entire question is whether those earnings hold. The lower-end methods (ROIC-justified P/B near $36, P/Sales near $72, FCF yield near $93, Graham Number near $93) are the ones least dependent on extrapolating peak margins, and they bracket a more conservative range much closer to the price. So the read is: clearly cheap if nitrogen stays tight, roughly fair to modestly cheap on normalized margins, and the buyback at a single-digit multiple is the mechanism that converts either outcome into per-share value as long as management is buying below intrinsic worth rather than below peak worth.
Catalysts
The Q1 2026 report was the recent catalyst and it was a blowout. Net earnings of $615 million and EPS of $3.98 beat the $2.50 estimate by a wide margin, EBITDA reached $1.01 billion, and adjusted EBITDA of $983 million was nearly double the year-ago figure, driven by higher prices across all segments amid a tight global nitrogen balance strained by the conflict with Iran and other supply disruptions, with India expected to drive demand in 2026. The next prints are a direct read on whether the nitrogen tightness persists or eases, since the entire earnings level is a function of the global price.
The forward catalysts split between the cycle and the capital plan. On the cycle, global nitrogen supply and demand, new capacity additions, natural-gas prices (CF's core cost advantage), and any resolution or escalation of the supply disruptions are the variables that move earnings. On capital allocation, the pace of the buyback against the $1.7 billion remaining authorization is a per-share-value lever, and progress on the Blue Point low-carbon ammonia joint venture with JERA and Mitsui, where civil construction is due to begin later in 2026, is the structural growth and cost catalyst to watch, along with the risk that its capital needs exceed current estimates. For a cheap cyclical generating peak cash, the catalysts that matter most are the durability of nitrogen prices and whether the returned capital is deployed at genuinely attractive levels.
Sources: CF Industries Q1 2026 net earnings $615M (StockTitan), CF Industries Q1 2026 earnings beat amid tight nitrogen markets (Investing.com), CF Industries Q1 2026 and low-carbon initiatives (Minichart), CF FY2025 10-K.
Peer Cohorts (Per Segment, With Filing Citations)
Ammonia / Granular Urea +3 more (reported)
- MOS (MOSAIC CO)
- (no filing in the citation store)
- UAN (CVR PARTNERS, LP)
- (no filing in the citation store)
- LIN (LINDE PLC)
- (no filing in the citation store)
- DOW (Dow Inc.)
- (no filing in the citation store)
- EMN (EASTMAN CHEMICAL CO)
- (no filing in the citation store)
- DD (DUPONT DE NEMOURS, INC.)
- (no filing in the citation store)
- ALB (Albemarle Corporation)
- (no filing in the citation store)
- CBT (Cabot Corporation)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.