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TheStreet Open House

CF Industries (CF) Stock Gets Barclays Cut

Stock quotes in this article: CF

NEW YORK (TheStreet) -- CF Industries (CF) has been downgraded to "equal weight" from "overweight" with a $267 price target, Barclays said Thursday.

The revision was mainly the result of a valuation call, though the firm also said it had reconsidered given the tough environment for fertilizer stocks over the coming months at this point in the crop cycle and as agricultural markets see their second year of supply growth.

By late afternoon, shares had taken off 3.7% to $245.92.

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Separately, TheStreet Ratings team rates CF INDUSTRIES HOLDINGS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CF INDUSTRIES HOLDINGS INC (CF) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, CF's share price has jumped by 38.62%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.53, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CF INDUSTRIES HOLDINGS INC is rather high; currently it is at 52.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.56% significantly outperformed against the industry average.
  • CF, with its decline in revenue, underperformed when compared the industry average of 12.6%. Since the same quarter one year prior, revenues fell by 10.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Chemicals industry and the overall market, CF INDUSTRIES HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
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