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Pro Analysis

CF Industries to rally more than 20% on improving fertilizer prices, Goldman says

A farmer sprays a chemical fertilizer on his wheat field
Remy Gabalda | AFP | Getty Images

Investors should buy CF Industries because of a better pricing environment for fertilizer, according to Goldman Sachs, which upgraded the company to buy from neutral.

"We expect pricing to materially improve in 2018+ as the global nitrogen market experiences a period of more balanced supply/demand following several large global capacity expansion
projects in recent years," analyst Adam Samuelson said in a note Monday. "We believe the recent turn in sentiment is overdone and see an attractive tactical entry point in shares."

Shares of the Illinois-based nitrogen fertilizer manufacturer and distributor were up more than 2 percent in midday trading Monday.

CF shares 5-day performance