Inside the Analyst Move
In addition, the firm has raised its FY2015 earnings estimates to a range of $21.08 to $22.79 per share and its FY2016 outlook to a range of $27.12 to $27.26 per share.
According to analyst Brett Wong: “We are upgrading shares of CF to Overweight from Neutral as we believe nitrogen nutrient fundamentals look favorable in 2015 and CF is poised to benefit from higher capacity and an improved FCF in FY16. We expect another strong corn planting in the U.S. of ~90M acres, which supports strong demand for nitrogen, specifically urea and UAN as farmers move to dry application and more side-dress. Natural gas prices have declined ~35% over the past month as global energy prices have declined and the forward curve suggests ongoing lower prices, which provides significant upside to our model. Looking out to FY16, we favor CF shares as key capacity expansion projects come online and as the FCF profile improves, which we believe provides opportunity for management to continue to buyback stock. We believe the multiple is set to expand and our price target increases to $327 using 12x FY16E EPS.”
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