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.
As a result, we rate the shares a Buy with a target of $125.00. This is 11.9x our 2008 estimate. Currently, CF Industries Holdings is valued at 9.9x our 2008 estimate of $10.49.
The company has one of the highest market shares in the US corn belt (26% nitrogen, 19% phosphate) making CF the closest pure-play on potential growth in US corn acres tied to ethanol production. CF is the second largest nitrogen producer in North America with 3.6m tons of ammonia and 2.5m tons of urea capacity. CF is the #3 producer of phosphate fertilizer in North America based on 1 million tons of phosphoric acid capacity in Florida.
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1 comment:
TRA, TNS are good as well?
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