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CF Industries Upgraded to “Overweight” at JP Morgan; Sees Better Fundamentals and Buybacks (CF)

By Dividend.com,  September 14, 2012, 09:16:24 AM EDT

Fertilizer maker CF Industries Holdings, Inc. ( CF ) on Friday received a big upgrade from analysts at JP Morgan.

The firm boosted its rating on CF from "Neutral" to "Overweight" and lifted its price target from $225 to $253. That new target suggests a 15% upside to the stock's Thursday closing price of $220.45.

A JP Morgan analyst commented, "Business fundamentals for CF strengthened materially through 2012: the price of corn is above $7.00/bushel, making for excellent farm economics; the stocks to use ratio for corn and soy are low values of 6.5% and 4.3%; domestic corn plantings in 2013 should again exceed 95 million acres; and finally, with stocks to use ratios very depressed in multiple grain categories, it will take more than one year to rebuild grain stocks, which could protect grain prices from sharp near-term negative volatility. CF announced a $3 billion share repurchase program, which, at current prices would lower its share count 20%, and it plans a number of high-return North American brown-field projects."

CF Industries shares rose $3.35, or +1.5% in premarket trading Friday.

The Bottom Line
Shares of CF Industries ( CF ) have a .73% dividend yield, based on last night's closing stock price of $220.45. The stock has technical support in the $200-$206 price area. The shares are trading at all-time highs.

CF Industries Holdings, Inc. ( CF ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: CF



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