CF Industries (CF) is the largest producer of nitrogen fertilizer in North America. The company also has a controlling stake in Terra Nitrogen (TNH). Together, these companies supply nitrogen fertilizer to farmers in the United States, which remains a net importer of nitrogen fertilizers.
This year, CF Industries rose to a peak of $36.9 in January. However, in the following months, its earnings and outlook failed to keep hopes high for CF Industries. YTD (year-to-date), the stock has delivered losses of 6.3%, underperforming the S&P 500 Index (SPY).
According to Reuters’ survey of 18 analysts, the consensus mean rating on the stock was currently at 2.5, which was similar to the fertilizer stocks we discussed previously. However, the overall recommendation on the stock for the next 12 months is a “buy.”
Overall, analysts’ recommendation on CF Industries remains unchanged month-over-month. As you can see in the above chart, two analysts had maintained a “strong buy” recommendation while six analysts had maintained a “buy” recommendation on the stock in July 2017. The number of analysts recommending a “hold” on the stock also remained unchanged at nine. Only one analyst had a “strong sell” recommendation on the stock.
Fewer analysts with a “sell” or a “strong sell” recommendation—as we saw for CF Industries, PotashCorp (POT), Mosaic (MOS), and Agrium (AGU)—is not uncommon, as these recommendations come from sell-side analysts.
The mean analyst price target for CF Industries as of July 13, 2017, stood at $30.7, which was to be achieved over the next 12 months. The median price target was slightly lower at $30 from the same sample of analysts surveyed by Reuters. If the current price converges to these price targets, investors would have an upside of just 1.5% to 4% on the stock.
Next, we’ll discuss recommendations and price targets for Monsanto.