JPMorgan Chase & Co. Downgrades CF Industries Holdings to Neutral (CF)
CF Industries Holdings (NYSE:CF) was downgraded by investment analysts at JPMorgan Chase & Co. from an “overweight” rating to a “neutral” rating in a note issued to investors on Thursday, TheFlyOnTheWall.com reports. They currently have a $210.00 price objective on the stock. JPMorgan Chase & Co.’s target price would indicate a potential downside of 0.06% from the stock’s previous close.
The analysts wrote, “CF’s share price has approached our December 2014 price target of $210 and we are lowering our investment rating from Overweight to Neutral. We are also reducing our earnings estimate for CF from $24.35 to $22.85 for 2013 and from $22.40 to $19.20 for 2014. Our reductions in earnings estimates reflect lower price realizations in the nitrogen fertilizer market as additional urea supply from China has weakened supply/demand balances, the ammonia market has moved lower over the past months, and UAN demand at this juncture is soft with the domestic harvest late and its price pressured lower by weakness in urea. CF remains a company with strong potential free cash flow generation after it finishes its large capacity expansions by the middle of 2016. Free cash flow generation to that point is likely to be more limited: we estimate the free cash flow yield of CF to be negligible in 2014 and to be 2% in 2015 before rising to 7.4% in 2016 and perhaps 12% in 2017. Accordingly, CF is a stock whose potential free cash flow generation four years away is to a degree an anchor of its current valuation. A second recent anchor of the share price is the company’s dividend policy. Taking a cue from public comments made by Third Point, CF recently increased its quarterly dividend from $0.40 to $1.00 or, annually, from $1.60 to $4.00.”
CF Industries Holdings (NYSE:CF) traded down 1.14% during mid-day trading on Thursday, hitting $210.13. 769,578 shares of the company’s stock traded hands. CF Industries Holdings has a 1-year low of $169.33 and a 1-year high of $233.43. The stock’s 50-day moving average is $192.2 and its 200-day moving average is $189.3. The company has a market cap of $12.037 billion and a price-to-earnings ratio of 7.45.
CF Industries Holdings (NYSE:CF) last issued its quarterly earnings data on Tuesday, August 6th. The company reported $8.38 earnings per share for the quarter, beating the analysts’ consensus estimate of $7.64 by $0.74. The company had revenue of $1.71 billion for the quarter, compared to the consensus estimate of $1.67 billion. During the same quarter last year, the company posted $8.71 earnings per share. CF Industries Holdings’s revenue was down 1.2% compared to the same quarter last year. Analysts expect that CF Industries Holdings will post $23.64 EPS for the current fiscal year.
The company also recently announced a quarterly dividend, which is scheduled for Friday, November 29th. Investors of record on Friday, November 15th will be paid a dividend of $1.00 per share. This represents a $4.00 annualized dividend and a dividend yield of 1.90%. The ex-dividend date is Wednesday, November 13th. This is an increase from CF Industries Holdings’s previous quarterly dividend of $0.40.
A number of other analysts have also recently weighed in on CF. Analysts at Piper Jaffray Cos. raised their price target on shares of CF Industries Holdings from $204.00 to $221.00 in a research note to investors on Wednesday, October 9th. They now have a “neutral” rating on the stock. Separately, analysts at BMO Capital Markets raised their price target on shares of CF Industries Holdings from $195.00 to $202.00 in a research note to investors on Friday, September 27th. They now have a “market perform” rating on the stock. Finally, analysts at BGC Financial raised their price target on shares of CF Industries Holdings from $175.00 to $185.00 in a research note to investors on Friday, September 27th. They now have a “sell” rating on the stock. Three research analysts have rated the stock with a sell rating, eight have assigned a hold rating and eight have assigned a buy rating to the company. The company currently has a consensus rating of “Hold” and an average target price of $221.63.
CF Industries Holdings, Inc is a manufacturer and distributor of nitrogen and phosphate fertilizer products worldwide.
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