CF Industries Holdings shares tumbling

Big drop in urea prices leads to downgrade of CF Industries Holdings shares, stock plummets

NEW YORK (AP) -- Shares of CF Industries Holdings Inc., which makes nitrogen and phosphate fertilizers, plummeted Friday after an analyst downgraded its shares on concerns that a recent drop in prices for urea, a nitrogen-containing substance, could last into next year.

Citi Investment Research analyst Jonathan Sullivan said in a note that global urea prices fell sharply this week, hurting the Deerfield, Ill.-based company, which gets 64 percent of its profits from selling nitrogen.

"The risk is that urea prices continue to decline as buyers delay their purchases and draw down inventories deeper than usual in anticipation of even lower prices," Sullivan wrote. "The timing and extent of this feedback loop is nearly impossible to predict or quantify, but could take weeks or months to play out."

He downgraded the stock to "Hold" from "Buy" and slashed his price target to $128 from $215, citing "recent weakness in global nitrogen pricing that could last through the end of 2008."

Shares tumbled $18.42, or 16.7 percent, to $91.78.