CF Industries (NYSE: CF - News) has leading market shares in many key fertilizers. Strong domestic and international grain markets have produced an exceptionally high global demand for fertilizer, translating into substantially higher selling prices for all the products.
CF is one of the largest manufacturers and distributors of nitrogen and phosphate fertilizer products in North America. The company's operations are organized into two business segments: the nitrogen fertilizer business and the phosphate fertilizer business. It supplies approximately 21% of the nitrogen and approximately 14% of the phosphate used in agricultural fertilizer applications in the US. Its core market and distribution facilities are concentrated in the Midwestern US grain producing states.
Currently, CF Industries Holdings is valued at 12.9x our 2008 estimate of $11.19. As a result, we rate the shares a Buy with a target of $160.00. This is 14.3x our 2008 estimate.
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