Why Is CF Industries (CF) Stock Up Today?

Agricultural company CF Industries (NYSE:CF) had a strong performance today on news that Russia will suspend exports of fertilizers. Specifically, CF stock saw a 5% jump on the news, just the latest in a string of promising trading days for the company.

A tractor spreading fertilizer over a farm field.
Source: Fotokostic / Shutterstock.com

What’s going on with CF lately?

Well, earlier today, the Russian Industry Minister announced a decision to temporarily cease fertilizer exports in order to combat higher food prices in the country. Russia produces 14% of urea in the world and meets 21% of potash global demand, both important inputs for fertilizer.

As you might imagine, CF stock investors were pleased by this news. U.S. fertilizer makers will likely have a production advantage compared to much of Europe and Asia. This is largely attributable to cheaper natural gas than its global counterparts.

With prospects on the stock having steadily risen in recent quarters, today’s news is likely icing on the cake. So, what else do you need to know about CF Industries?

CF Stock Sees More Gains Following Fertilizer Announcement

Since the start of Russia’s invasion of Ukraine, CF stock has been in focus. What’s more, the company has reported strong earnings numbers quarter after quarter. In its latest fourth-quarter earnings call, CF’s gross margin increased from 16.3% to 45.5% year-over-year (YOY).

Many suspect that Russia’s invasion of Ukraine will put even more upward pricing pressure on ammonia-based fertilizers, putting companies like CF in the spotlight. The raw materials necessary to make fertilizers typically require large amounts of natural gas. So, companies with a competitive advantage in that space are currently promising.

CF stock joins a number of fertilizer names making gains lately. Mosaic (NYSE:MOS) and Corteva (NYSE:CTVA) are also up more than 7% and 4% respectively today.

Since September, CF has more than doubled its stock price, from around $46 then to $97 per share today. Now, many investors believe it’s poised to continue making strong gains given the current geopolitical climate.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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