CF

We rate CF Industries Holdings, Inc. (CF) as a Hold with a composite score of 63.9/100 at a current price of $95.91. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (89th percentile) and value (86th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (40th percentile) and momentum (54th percentile) tempers our overall conviction. We assign a Narrow Moat rating (58/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CF Industries Holdings, Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 63.9/100 places it at rank #354 in our full 7,333-stock universe. With a $14.5B market capitalization, CF Industries Holdings, Inc. operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 6%, though momentum at the 54th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 36% (-6.3pp vs sector) narrow to operating margins of 31% (+29.5pp vs sector) and net margins of 24.9%, yielding a gross-to-net conversion rate of 69%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $95.91, CF Industries Holdings, Inc. appears undervalued relative to its fundamentals. Our value factor score of 86/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 9.2x (a 59% discount to the sector median of 22.3x), EV/EBITDA of 8.9x (discounted to peers), P/B of 2.0x, P/S of 2.3x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to CF Industries Holdings, Inc.. The company exhibits strong financial stability with a beta of 0.38, conservative leverage (39% D/E), and a stability factor in the 89th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.38 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 89th percentile and quality factor at the 63th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (89th percentile) suggests predictable business dynamics; a 2.23% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate CF Industries Holdings, Inc.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 21.4%, disciplined leverage (39% D/E), a 2.23% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — CF Industries Holdings, Inc. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 2.23% dividend yield, and the combination of 11.6% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, CF Industries Holdings, Inc. receives a Hold rating with a composite score of 63.9/100 (rank #354 of 7,333). Our quantitative framework assigns a Narrow Moat (58/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 66/100.

Our analysis supports a neutral stance on CF Industries Holdings, Inc.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.