CF INDUSTRIES HOLDINGS, INC. (CF): what the price assumes
boothcheck covers CF INDUSTRIES HOLDINGS, INC. (CF) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-25.
Generated: 2026-08-31 · Source: https://boothcheck.com/report/CF
Headline
| Field | Value |
|---|---|
| Ticker | CF |
| Company | CF INDUSTRIES HOLDINGS, INC. |
| Sector / Industry | Basic Materials |
| Current price | $125.79/sh |
| Composition | Ammonia 31% / Granular Urea 25% / UAN 31% / AN 6% / Other 8% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 14.4% |
| Operating margin today | 41.1% |
| Margin compression (value-band) | -26.7pp |
| Multiple paid | 6x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in 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 7.9% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.53σ |
| cohort percentile (of 78 peers) | 3 |
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 | 0.70x | 5 | justifies |
| Earnings | 0.69x | 4 | justifies |
| Relative | 0.26x | 2 | justifies |
| Growth | 0.36x | 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 8.0%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $1058.45 | 0.12x | yes | FCF base $3.1B, growth 20% (input: historical growth), terminal g 4.0%, WACC 7.9%, 6yr projection |
| DCF Exit Multiple | Growth | $353.22 | 0.36x | yes | Exit EV/EBITDA: 4.4x / 6.4x / 8.4x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | — | — | no | 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 | $178.59 | 0.70x | yes | BV/sh $37.98, ROE (TTM) 43.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $443.92 | 0.28x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $186.69 | 0.67x | yes | Rev $7.7B, growth 20% (input: historical growth; tapered), Terminal P/S: 2.0x / 2.5x / 2.9x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $471.10 | 0.27x | yes | EPS $13.46, growth 35% (input: historical EPS growth), PEG=0.22 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $243.48 | 0.52x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $3.11B × (1−20%) / WACC 7.9% → EPV (no growth) |
| Residual Income | Asset | $285.28 | 0.44x | yes | BV $37.98 + 5yr PV of (ROE (TTM) 43.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $107.25 | 1.17x | yes | √(22.5 × EPS $13.46 × BVPS $37.98) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $3.41B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $116.94 | 1.08x | yes | FCF $1910.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $434.31 | 0.29x | yes | EPS $13.46 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $48.95 | 2.57x | yes | BV $37.98 × (ROIC 10.2% / WACC 7.9%) |
| P/Sales Sector | Relative | — | — | no | Revenue $7.74B × sector P/S 1.5x |
| PEG Fair Value | Relative | $504.75 | 0.25x | yes | EPS $13.46 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $145.51 | 0.86x | yes | EPS $13.46 / 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 | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Ammonia | operating | enterprise | $2.2b | $682.0m operating-income | withheld | unresolved no unit value |
| Granular Urea | operating | enterprise | $1.8b | $837.0m operating-income | withheld | unresolved no unit value |
| UAN | operating | enterprise | $2.2b | $921.0m operating-income | withheld | unresolved no unit value |
| AN | operating | enterprise | $421.0m | $79.0m operating-income | withheld | unresolved no unit value |
| Other | operating | enterprise | $545.0m | $205.0m operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $736.0m |
| Net debt / NOPAT (after-tax) | 0.29x |
| Net debt / operating income (pre-tax) | 0.23x |
| Interest coverage | 18.6x |
| Share count CAGR (buyback) | -7.4% |
| Burning cash | no |
Bullet Takeaways
- Nitrogen is a spread business and CF sits on the cheap side of it, earning a 35.4% operating margin over the trailing year while the closest listed nitrogen pure-play, CVR Partners (UAN), earned 23.6%.
- The single input that sets the cost base is the one nobody controls: over the three years to December 2025 the daily Henry Hub price ranged from 1.23 dollars per MMBtu to 12.97 dollars per MMBtu, and a colder, tighter gas market compresses the spread before a single ton of demand disappears.
- Watch Blue Point, where the company is building low-carbon ammonia capacity with partners funding 60% of the capital, and where the demand the plant is being built for is described in the company's own filing as "developing demand for low-carbon ammonia for new applications of our products".
Bull Case
Growth, at a nitrogen producer, almost never means more tons. The industry adds capacity in five-year lumps, and a company that floods its own market with new volume gets exactly what it deserves. So the numbers here should be read the way you read a mature industrial with one genuinely new product line rather than the way you read a company compounding units. What CF is trying to grow is what a molecule of ammonia is worth, not how many of them come out of Donaldsonville.
Start with the cost side, because in this business it is the whole argument. The 10-K states it without ornament: "Natural gas is the principal raw material used to produce our nitrogen products." Ammonia is made by pulling hydrogen off methane, so a plant sitting on North American gas competes against plants sitting on gas that costs a great deal more, and the difference between those two feedstock bills is most of what shows up as margin. That position is why the trailing operating margin runs at 35.4%. Set it against the cohort and the gap is not subtle: MOS earned 0.9% at the operating line, ALB was negative, CBT managed 15.7%, and LIN, an industrial gas company with genuine pricing power, reached 26.5%. Even UAN, the closest listed nitrogen pure-play, came in at 23.6%.
The new product line is low-carbon ammonia, and the mechanics are more interesting than the label. At Donaldsonville the company launched low-carbon production by capturing carbon dioxide that "would otherwise be emitted into the atmosphere" and handing it to ExxonMobil, its stated partner for transport and permanent storage, with the project qualifying for credits under Section 45Q. The molecule leaving the plant is chemically identical. What changed is its carbon accounting, and in Europe that accounting has a price attached, because the EU's border adjustment mechanism now imposes costs on imported ammonia based on the emissions behind it. A producer that can document a low-carbon molecule is selling into a market where the alternative just got more expensive by regulation rather than by chemistry.
Blue Point is the scaled version of that idea, and it has been structured so shareholders are not carrying it alone. The joint venture consolidates all of its capital spending, "of which 60% is funded by our joint venture partners through capital contributions to the joint venture". The oxygen and nitrogen the plant needs will come from an air separation unit that LIN designs, builds, owns and operates under a long-term supply agreement, so that piece of the plant never appears on CF's capital account at all. A greenfield ammonia complex is one of the more punishing capital commitments in industrial chemistry. Handing most of the check to partners and outsourcing the utility block changes the arithmetic considerably.
Meanwhile the capital that is not going into plants is going into the stock, and heavily. The board authorized 3 billion dollars of repurchases in November 2022, and the company finished that program in October 2025 having bought 13.2 million shares during the year, then moved straight into a fresh 2 billion dollar authorization running through the end of 2029. The share count has fallen about 7.4% a year over the four years to March 2026. That is roughly a quarter of the company retired, which means a holder who bought nothing owns meaningfully more of every future ton. Management is telling you where it thinks the returns are, and it is not saying it in a press release. It is saying it with the checkbook.
Bear Case
One variable has more leverage on this thesis than every operating decision combined, and it is set by weather, drilling economics and liquefied natural gas exports rather than by anything happening at a fertilizer plant. Over the three years to December 2025, the daily settle at Henry Hub ran from a low of 1.23 dollars per MMBtu in November 2024 to a high of 12.97 dollars per MMBtu in January 2024. That is a tenfold range on the single largest line in the cost of goods. The company hedges some of it, and hedging is its own exposure: the 10-K notes it uses natural gas derivatives and warns of the risk that "our hedging activities might not prevent losses". In the first quarter of 2026 that risk was not theoretical. Higher gas costs including realized derivatives cut gross margin by 76 million dollars.
The selling side offers no offset, because it is a commodity too. The 10-K describes gross margin and expected future cash flows from nitrogen products as sensitive both to the prices those products fetch and to the cost of the gas that makes them. Both ends of the spread are set in markets CF trades in and does not make. A producer with a 35.4% operating margin looks like a business with pricing power. It is more accurately a business with a cost advantage, and a cost advantage is worth exactly what the gap between two commodity curves happens to be that year.
The decarbonization strategy, which is the growth part of the story, rests on policy rather than on customer demand that already exists. The credits at Donaldsonville come from Section 45Q of the tax code. The European pull comes from a border adjustment mechanism. And the company's own description of the end market is honest to the point of being awkward for a bull: it refers to "developing demand for low-carbon ammonia for new applications of our products". Developing is the correct word. It is also not the word you want attached to the demand curve for a multi-year construction project. Blue Point commits capital now against a market that regulation is still assembling, and while partners fund the majority of it, CF is consolidating all of that spending and carrying the operating risk on an asset whose premium pricing depends on rules a future legislature can rewrite.
Smaller exposures rhyme with the same theme. The company holds an equity method investment in PLNL carried at 39 million dollars, alongside an obligation to purchase half the ammonia that facility produces, and the filing contemplates the possibility that the partner could "cease operating its facility, which would trigger an impairment assessment of our remaining investment in PLNL". Physical plants have their own way of interrupting the story: the first quarter of 2026 carried unabsorbed fixed costs from downtime at the Yazoo City complex. Neither item is large. Together they describe a business where several things must go right at once for a quarter to look clean.
None of this is an argument that the shares are expensive. They plainly are not, and the methods used to triangulate the business mostly land above the current price rather than below it. The bear case here is the reason a market discounts a business like this anyway: the earnings are a spread between two commodities, the strategy leans on tax and trade policy, and the multiple the market is willing to pay for such a stream tends to fall exactly when the spread is at its widest. Buying the low multiple is only rewarding if the profit behind it holds. Nothing in the cost structure guarantees that it will.
Valuation
The market is not asking this business to grow. At $125.10 the price sits under the level that would be warranted even if operating profit shrank by five percent a year from here, which is an unusual thing to be able to say about a company earning a 35.4% operating margin. Read that as a bound rather than a forecast. It does not mean the price predicts decline; it means the price would still be defensible if decline arrived, which is a different and considerably more comfortable statement.
The methods used to triangulate the business agree with that reading almost uniformly. Peer multiples, the earnings-power approaches and the forward cash-flow approaches all center above today's quote. The one that carries the most weight for a cyclical is the earnings-power method that takes operating profit averaged over five years, adds back one-time charges, taxes it, and capitalizes the result assuming no growth whatsoever. That method reaches well above the price, and it does so without giving the company credit for a single additional ton or a single new customer. Notably, the trailing year sits below that five-year average rather than above it, so the usual objection to a cheap cyclical, that the multiple is low because earnings are at a peak, does not fit the arithmetic here. Two of the most conservative screens in the set, a square-root formula on earnings and book value and a zero-growth capitalization of last year's free cash flow, do land under the current price. They are the dissenting voices, and the free-cash-flow one is measuring a year in which the company was funding a construction project.
At about nine times operating income the whole enterprise sits in the lower half of the peer multiple range, which is where the interesting question lives. This cohort spans phosphate, industrial gases and diversified chemicals, so the comparison is positional rather than exact, and CF's own economics are the best in it: 35.4% at the operating line against 26.5% for LIN, 23.6% for UAN and 0.9% for MOS. The market is applying a below-average multiple to above-average margins. That is not an error the market makes by accident. It is what a market does when it thinks the numerator is durable and the denominator is not.
Book value stands near 34.58 dollars a share against trailing earnings of 11.10 dollars, which is a return on equity most industrial companies never see, and the balance sheet behind it is not doing anything dramatic. Operating income covers the interest bill roughly 16.6 times over, there is no cash burn, and the share count has been falling about 7.4% a year over the four years to March 2026, funded by the repurchase programs the company disclosed rather than by asset sales. What the price is actually underwriting, then, is not growth and not a balance sheet repair. It is the durability of a spread between two commodity curves, and the market is buying it at a discount to what the methods say it is worth precisely because that spread has never stayed still for long.
Catalysts
The most consequential near-term item is a construction schedule rather than an earnings print. At the Blue Point complex the joint venture has executed agreements including a long-term supply arrangement under which a Linde subsidiary will design, construct, own and operate the air separation unit feeding the low-carbon ammonia plant, and that contract is what allowed the company to firm up its cost estimate for the facility. Joint venture partners fund 60% of the capital while CF consolidates all of it, so the reported spending line will look heavier than the shareholder commitment behind it. Anyone tracking this name should read the capital section of each quarterly filing with that split in mind.
Capital returns have a defined runway attached. The 2022 authorization of 3 billion dollars was completed in October 2025 with 13.2 million shares repurchased during that year, and the board's May 6, 2025 authorization of a further 2 billion dollars runs through December 31, 2029. The pace at which that second program is drawn down is the cleanest available read on how management sees the value of its own shares against the value of new plant.
Two operational markers are worth watching in the next couple of prints. Gas cost, including the effect of realized derivatives, reduced gross margin by 76 million dollars in the first quarter of 2026, and maintenance downtime at the Yazoo City complex left fixed costs unabsorbed in the same quarter. Customer advances, which are prepayments for product not yet delivered and therefore a live signal on how buyers are positioning, stood at 132 million dollars at March 31, 2026 against 77 million dollars at the end of 2025. That is a demand indicator that shows up before the revenue does.
Peer Cohorts (Per Segment, With Filing Citations)
Ammonia / Granular Urea +3 more (reported)
- MOS (MOSAIC CO)
- FY2025 10-K: …costs per unit. We are also vertically integrated to captively supply one of our key inputs, phosphate rock, to our phosphate production facilities. We believe that our position as an integrated producer of phosphate rock provides us with a significant cost advantage over competitors that are non-integrated phosphate…
- FY2025 10-K: …mix and parameters of these sales programs vary over time based on our marketing strategy, which considers factors that include, among others, optimizing our production and operating efficiency within warehouse limitations, as well as customer requirements. The use of forward sales programs and the level of customer…
- UAN (CVR PARTNERS, LP)
- FY2025 10-K: …UAN $ 79,293 $ (16,985) Ammonia 25,477 (12,341) Ammonia and UAN sales price variances were favorable primarily due to aforementioned improved pricing and inventory conditions within the Sales Volume and Pricing per Ton discussion above. Cost of Materials and Other - The $2.6 million increase for the year ended…
- FY2025 10-K: …production consumed approximately 36% of the annual United States corn crop used by the market. Further, potential year-round, nationwide E15 (gasoline blended with 15% ethanol) expansion is expected to support fertilizer demand and pricing by driving increased, long-term demand for corn. Results of Operations The…
- LIN (LINDE PLC)
- FY2025 10-K: …lin:InsuranceContractMember 2024-12-31 0001707925 us-gaap:FairValueInputsLevel1Member us-gaap:PensionPlansDefinedBenefitMember lin:DefinedBenefitPlanLiquidAlternativeInvestmentMember 2025-12-31 0001707925 us-gaap:FairValueInputsLevel1Member us-gaap:PensionPlansDefinedBenefitMember…
- FY2025 10-K: 7925 country:US 2023-12-31 0001707925 country:CN 2025-12-31 0001707925 country:CN 2024-12-31 0001707925 country:CN 2023-12-31 0001707925 country:DE 2025-12-31 0001707925 country:DE 2024-12-31 0001707925 country:DE 2023-12-31 0001707925 country:BR 2025-12-31 0001707925 country:BR 2024-12-31 0001707925 country:BR…
- DOW (Dow Inc.)
- FY2025 10-K: …UCARSOL ™ Amines and related technology for carbon capture and gas treating, ethanolamines, ethylene oxide ("EO"), ethyleneamines, ELEVATE ™ Additives for enhanced oil recovery, UCON ™ Fluids, DOWANOL ™ Glycol Ethers, DOWTHERM ™ Heat Transfer Fluids, DOWFROST ™ Fluids for data center cooling; higher glycols,…
- FY2025 10-K: …us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001751788 dow:DowInc.Member dow:TheDowChemicalCompanyMember us-gaap:AdditionalPaidInCapitalMember 2025-01-01 2025-12-31 0001751788 dow:DowInc.Member dow:TheDowChemicalCompanyMember us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-12-31 0001751788…
- EMN (EASTMAN CHEMICAL CO)
- FY2025 10-K: …gut health solutions preservation and hygiene Coatings Additives Polymers cellulosics polyesters polyolefins Additives and Solvents Texanol ™ Optifilm ™ ketones esters EastaPure ™ electronic chemicals specialty coalescents specialty solvents paint additives specialty polymers BASF SE Dow Inc. OXEA Celanese…
- FY2025 10-K: …emn:AdvancedMaterialsMember 2025-01-01 2025-12-31 0000915389 srt:AsiaPacificMember us-gaap:GeographicConcentrationRiskMember us-gaap:SalesRevenueSegmentMember emn:AdvancedMaterialsMember 2024-01-01 2024-12-31 0000915389 srt:AsiaPacificMember us-gaap:GeographicConcentrationRiskMember us-gaap:SalesRevenueSegmentMember…
- DD (DUPONT DE NEMOURS, INC.)
- FY2025 10-K: …2025-01-01 2025-12-31 0001666700 us-gaap:EmployeeStockOptionMember srt:MinimumMember dd:TheDowChemicalCompany2012StockIncentivePlanMember 2025-01-01 2025-12-31 0001666700 us-gaap:EmployeeStockOptionMember srt:MaximumMember dd:TheDowChemicalCompany2012StockIncentivePlanMember 2025-01-01 2025-12-31 0001666700…
- FY2025 10-K: …dated as of November 1, 2025, that the Applicable Percentage (as defined in the Electronics Separation and Distribution Agreement) of DuPont is 56 percent and of Qnity is 44 percent. Indemnifications In connection with the Qnity Distribution, Qnity and DuPont indemnify one another against certain litigation,…
- ALB (Albemarle Corporation)
- FY2025 10-K: …7,000 to 8,500 feet below sea level. The mineralization occurs within the highly saline Smackover Formation waters or brine where the bromide has an abnormally rich composition. The bromine concentration is more than twice as high as that found in normal evaporated seawater. The bromine mineralization of the brine is…
- FY2025 10-K: …facility, with an effective date of December 31, 2025. A copy of the QP's most recent technical report summary with respect to the bromine mineral resource and reserve estimates at the Magnolia facility, dated February 11, 2026, is filed as Exhibit 96.6 to this report. The amounts represent Albemarle's attributable…
- CBT (Cabot Corporation)
- FY2025 10-K: …sale of specialty carbons and products for battery materials applications with a mix of global and regional companies. In recent years, a number of these companies that operate regionally have increased the export of products outside their region of manufacture. For fumed alumina, we compete primarily with one…
- FY2025 10-K: …small doses of additives. In addition, our electrically conductive compound products generally are used to help ensure uniform conductive performance and reduce risks associated with electrostatic discharge in plastics applications. Our battery materials products include our conductive additives and fumed alumina,…
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.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- 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.
Sources
FY2025 10-K · FY2025 10-K and Q1 FY2026 10-Q · Q1 FY2026 10-Q