CF Shares Up 15% in 3 Months: Here's What's Driving the Upside

CF Industries Holdings, Inc. CF shares have rallied 14.6% in the past three months. The company has also outperformed the Zacks Fertilizers industry’s 5.3% growth over the same time frame. 

CF Industries’ rally is supported by strong nitrogen demand, higher fertilizer prices and a tightening global supply-demand balance, reinforced by geopolitical disruptions that constrain supply. Robust cash flow, aggressive share buybacks and a 20% dividend increase further strengthen investor confidence and shareholder returns. 

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Let’s take a look at the factors that are driving CF stock. 

CF Industries Benefits From Durable Nitrogen Demand

CF Industries is expected to benefit from durable nitrogen demand through 2026 and into 2027. Management expects global nitrogen demand to remain constructive as lower prices entering the second half of 2026 encourage deferred purchases. India, Southeast Asia and other markets are expected to import urea at or above second-half 2025 levels.  

The company projects Indian urea imports of roughly 10-11 million metric tons in 2026 and Brazilian imports of roughly 7-8 million metric tons, with Brazil demand weighted to the second half. In North America, July 2026 ammonia and UAN fill programs saw firm uptake while channel inventories are projected below average. Management expects global nitrogen capacity additions under construction to lag demand growth over the next four years, tightening the supply-demand balance.

Higher selling prices lifted second-quarter 2026 net sales to $2.22 billion from $1.89 billion a year earlier, with prices higher across all segments. CF operated at 98% of available ammonia capacity in the first half, helping it capture favorable market conditions despite the Yazoo outage.  

The Iran conflict disrupted Middle East trade, with management estimating losses of 4-4.5 million metric tons of urea and about 1 million tons of ammonia. Prices returned to pre-conflict levels by quarter-end, but management expects supply to remain constrained through 2026 and into 2027 as geopolitical risks and European production economics limit availability. 

CF Industries Expands Shareholder Returns Through Buybacks

CF Industries continues to deploy cash through buybacks and dividends. It repurchased 2.2 million shares for $245 million in the first half of 2026, including 2 million shares for $230 million in the second quarter. Since the current $2 billion program began in October 2025, the company has repurchased 5.6 million shares for about $523 million, leaving roughly $1.48 billion authorized through 2029 as of June 30, 2026. In July 2026, the board also raised the quarterly dividend by 20% to 60 cents per share. 

CF Industries ended the second quarter with $2.48 billion of cash and cash equivalents, including $341 million held by Blue Point One, while long-term debt was essentially unchanged at $3.22 billion. Net cash from operating activities rose to $1.37 billion in the first half of 2026 from $1.15 billion a year earlier. Trailing 12-month free cash flow was $1.82 billion. Management expects CF-funded capital expenditures of about $950 million in 2026, excluding the Yazoo City rebuild. Blue Point’s partners fund the joint venture according to ownership interests. Permits received in July 2026 allow construction to commence in August.

CF’s Zacks Rank & Key Picks

CF currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the Basic Materials space are Worthington Steel, Inc. WS, Carpenter Technology Corporation CRS and Avient Corporation AVNT. WS currently sports a Zacks Rank #1 (Strong Buy), while CRS and AVNT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for WS’ current-year earnings stands at $3.4 per share, implying a 52.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 13.8%. Shares of the company are down around 21.4% in the past three months.

The Zacks Consensus Estimate for CRS’ current-year earnings is pegged at $13.09 per share, implying a 21.7% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 8.4%. Shares of CRS have fell around 2.2% in the past three months.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%. Shares of AVNT have surged around 25.1% in the past three months.

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This article originally published on Zacks Investment Research (zacks.com).

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