CF Industries Earnings: Nitrogen Prices Will Likely Be Lower Again in 2024

CF Industries' fourth-quarter results reflected lower nitrogen prices that were partially offset by lower U.S. natural gas prices reducing the company's input costs. Adjusted EBITDA fell over 50% versus the prior-year quarter due to lower prices. For nitrogen producers, 2022 marked peak cyclical conditions, with nitrogen prices reaching multiyear highs. As such, we had expected CF's profits would see cyclical highs in 2022 and decline in 2023. Having updated our model to incorporate these results, we maintain our $85 fair value estimate. Our narrow moat rating is also unchanged.