CF Industries Holdings, Inc.’s CF shares have popped 27.5% over the past three months. The company has also outperformed the Zacks Fertilizers industry’s 4.5% rise over the same time frame. CF has also topped the S&P 500’s roughly 9.4% increase over the same period.
The upside has been driven by the company’s forecast-topping earnings performance in the first quarter, buoyed by strong nitrogen fertilizer demand in major markets, higher nitrogen prices and its operational strength.
CF’s 3-month Price Performance
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Let’s take a look at the factors that are driving this fertilizer maker.
CF Stock Gains on Strong Nitrogen Demand, Higher Prices
CF Industries is capitalizing on the growing global demand for nitrogen fertilizers, driven by strong agricultural activity. Global nitrogen requirement is expected to remain strong in the near future due to recovering industrial demand and farmer economics.
High levels of corn-planted acres in the United States should drive the demand for nitrogen. Demand in North America is expected to be fueled by favorable farm economics. Demand for urea is likely to remain healthy in Brazil in 2026, driven by higher corn plantings. In India, demand is expected to be driven by low inventory levels, reduced domestic production and undelivered volumes due to the Iran war. The company expects India’s urea imports to rise year over year in 2026, potentially reaching 10-12 million metric tons.
CF, on its first-quarter call, said the global nitrogen market remains tight in 2026 due to strong demand, geopolitical disruptions and constrained natural gas availability. The Middle East conflict has further tightened the global nitrogen supply-demand balance.
Higher nitrogen prices have also contributed to a boost in CF Industries’ revenues. In the first quarter, net sales rose roughly 19% year over year on pricing strength. The average selling prices for the company’s core products increased compared to the prior year, driven by supply disruptions and strong global nitrogen demand. Looking ahead, CF should continue to benefit from favorable pricing trends.
CF’s Solid Cash Flow Supports Shareholder Returns
CF Industries continues to focus on enhancing shareholder value by utilizing its strong cash flow, thanks to strong operational performance, strategic execution and supportive nitrogen industry fundamentals. For full-year 2025, net cash from operating activities was $2.75 billion, while free cash flow was $1.79 billion, up roughly 21% and 24% year over year, respectively. The company’s cash and cash equivalents were roughly $2 billion at the end of the first quarter. Net cash provided by operating activities was $496 million for the quarter.
The company is efficiently converting adjusted EBITDA to free cash flow. Its full-year 2025 free cash flow to adjusted EBITDA conversion rate was 62%, outpacing sector averages. The same for the first quarter was 51%.
CF returned $1.7 billion to its shareholders in 2025. It repurchased 16.6 million shares for $1.34 billion during 2025. Since the commencement of its current $2 billion buyback program in October 2025, CF Industries has bought back 3.6 million shares for around $293 million.
More Room to Run?
CF has rallied on strong nitrogen demand and higher pricing, driving earnings beats. Robust cash flow supports aggressive buybacks and a healthy dividend, reinforcing shareholder returns. Favorable farm economics, strong import demand and disciplined capital allocation underpin earnings visibility, which is expected to fuel continued upside.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
CF’s Zacks Rank & Key Picks
CF currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the Basic Materials space are Nucor Corporation NUE, L.B. Foster Company FSTR and Albemarle Corporation ALB, each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Nucor’s current-year earnings stands at $14.58 per share, implying an 89.1% year-over-year increase. NUE’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with an average surprise of 8.1%.
The consensus estimate for L.B. Foster’s current-year earnings is pegged at $1.74 per share, implying a 152.2% year-over-year increase. The Zacks Consensus Estimate for FSTR’s current-year earnings has been revised 12.3% higher over the past 60 days.
The Zacks Consensus Estimate for Albemarle’s current-year earnings is pegged at $12.45 per share, indicating a 1,675.9% year-over-year increase. ALB’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 74.5%.
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This article originally published on Zacks Investment Research (zacks.com).