The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.
Several midstream stocks hit their respective 52-week lows in the last five days. Crude oil prices took a hit yesterday amid concerns over trade talks.
In the week ending September 28, the EIA (U.S. Energy Information Administration) reported that the natural gas prices in the United States were mixed.
Low natural gas prices in the US have been highly beneficial for North American fertilizer companies (XLB) including CF Industries (CF), CVR Partners (UAN), Nutrien (NTR), and Mosaic (MOS).
CVR Partners is expected to report a loss per share of $0.06 in the second quarter compared to a loss per share of $0.03 in the corresponding quarter a year ago.
Wall Street analysts estimate sales growth of $102 million in the second quarter, which would be a 4% year-over-year increase from $98 million in the second quarter of 2017.
Last week, urea prices continued their positive momentum from a week ago in the NOLA (New Orleans) region of the United States as well as in the Brazil region.
In the recent quarters, fertilizer companies (MOO) have rationalized their output and costs to sustain the downward momentum in fertilizer prices that seemed to keep going down.
After recent peaks, natural gas prices have fallen back to normal levels. Recently, natural gas prices have been high on the back of severe winter conditions in North America.
CVR Partners, the MLP involved in nitrogen fertilizer production, was the top MLP loser in the week ending January 26. The partnership fell 7.1% last week.
In the week ending January 19, natural gas prices at Henry Hub remained elevated with the prices peaking at $5.46 per MMBtu (million British thermal units) on January 16, 2018.
In the week ending January 19, the VanEck Vectors Agribusiness ETF (MOO) rose 1%, and the broader market S&P 500 (SPY) also ended in positive territory with a gain of 1.2%.
Nineteen Wall Street analysts are covering CF Industries. They have a consensus mean rating of 2.7 on the stock with an overall “hold” recommendation as of January 10, 2018.
Natural gas is one of the key input components for gas-based nitrogen fertilizer producers (MOO)(MXI) such as CF Industries (CF), Terra Nitrogen (TNH), CVR Partners (UAN), and Nutrien (NTR).
In the earlier part of this series, we discussed how shipments impacted CF Industries’ (CF) sales. From our analysis, it’s clear that a rise in selling prices remains the most important growth catalyst for the company.
The remaining companies In this part, we’ll compare the five remaining agribusiness companies’ valuation, again using forward EV-to-EBITDA (enterprise value-to-earnings before interest, tax, depreciation, and amortization) multiples. Valuation multiples As shown in the above chart, the remaining companies’ valuation multiples have risen in the last two years. At 18.3x, FMC (FMC) was trading at a premium to the peer […]
Nitrogen in 2018 Nitrogen prices remained weak for most of 2017, falling as much as 27% YoY (year-over-year). Ammonia, a fundamental nitrogen input, is further upgraded to nitrogen fertilizers such as urea and urea ammonium nitrate. Ammonia supply As shown in the above chart, ammonia capacity saw a net addition of five million metric tons, or […]
CVR Partners, an MLP involved in nitrogen fertilizer production, was the biggest MLP gainer last week (ended December 8), rising 17.4% during the week.
CVR Partners (UAN) emerged as the top gainer last week, rising 17.4% week-over-week to close at $3.70. CF Industries (CF) followed, rising 4.4% to close at $39.30.
During 3Q17, urea prices were stronger year-over-year. According to Agrium (AGU), urea prices were positively impacted due to growth in demand from the Indian market as well as lower exports coming out of China.
In the previous part of this series, we saw how CF Industries’ (CF) overall and segment sales performed in 3Q17. The company’s growth was mainly driven by shipments growth.
In 3Q17, CF Industries (CF) sales saw growth across each of its five segments year-over-year. Overall, the company’s sales grew 28% year-over-year to $870 million from $680 million in 3Q16.
Last week, the VanEck Vectors Agribusiness ETF (MOO) closed 40 basis points higher from the start of the week. The S&P 500 Index (SPY) ended the week 62 basis points higher.
As of September 18, the consensus mean price target on CMP stood at $69.5 per share, which was about 1.6% lower than the closing price of $70 on the same day.
CF Industries CF Industries (CF) has had a decent run so far this year. YTD (year-to-date), the company has returned 11.5%, which is slightly shy of the S&P 500 Index’s (SPY) return of 11.8% over the same period. Over the last one month alone, the stock has risen by ~20.9%, which has left behind other […]
Over the past ten-year period, Scotts Miracle-Gro has risen 193.0% and significantly outperformed the S&P 500 Index’s rise of 69.2% over the same period.
Calendar 2Q17 remained subdued for the nitrogen fertilizer pricing environment. Cheap energy costs have driven capacity buildups and flattened the cost curve.
CF Industries (CF) is expected to see a significant reduction in its capital expenditure (or capex) year-over-year (or YoY) in 2Q17 and for the next four quarters.
CF Industries is set to announce its 2Q17 earnings after the market closes on August 2, 2017. The company is expected to report earnings per share of $0.01 in the quarter.
