CF Industries Holdings, Inc. (CF) stock intrinsic value fair value estimate & owner earnings analysis

CF Industries makes nitrogen for farms and industry: ammonia, granular urea, UAN solution and ammonium nitrate. It has six U.S. plants: Donaldsonville and Waggaman, Louisiana; Port Neal, Iowa; Yazoo City, Mississippi; and Verdigris and Woodward, Oklahoma. It also has two plants in Canada (Medicine Hat, Alberta and Courtright, Ontario) and one at Billingham in the United Kingdom. It sold about 19 million product tons in each of 2023, 2024 and 2025. Profit comes from the gap between the price of nitrogen and the cost of making it. Natural gas is the main cost. In 2025 CF's gas cost rose to $3.31 per MMBtu from $2.40, and the company says that cut gross margin by about $316 million. This gap swings widely, so the business is cyclical and we value it across a full cycle. How we measured earnings. We start from operating cash flow and remove short-term working-capital swings. We then deduct stock pay, the spending needed to keep the plants running, and cash paid to minority partners. The main partner is CHS Inc., which owns about 11% of the unit that holds five of the U.S. plants and received $304 million in 2025. On this basis, earnings per share were $3.70 in 2018, $4.98 in 2019, $3.62 in 2020, $8.13 in 2021, $19.07 in 2022, $9.30 in 2023, $7.69 in 2024 and $11.50 in 2025. Two judgement calls matter. First, in 2021-22 revenue jumped because prices rose, while volume fell from 20.3 million tons in 2020 to 18.3 million in 2022. So we counted all of that period's capital spending as upkeep, not growth. Second, 2025 spending of $950 million included $316 million for the new Blue Point project. We counted only the $620 million spent on existing operations, plus $14 million of capitalized interest, as upkeep. We start the record in 2018. Before then the plant base was still being built out ($2.2 billion of capital spending in 2016), and in 2018 CF bought out the public owners of its Terra Nitrogen partnership. We use the middle of the 2018-2025 results as our earnings base: $7.91 per share. That period covers the 2018-20 low point, the 2022 spike and the years since. CF has kept repurchasing stock: diluted shares fell from an average of 162.2 million in 2025 to 153.9 million in the second quarter of 2026. That lifts the same earning power to about $8.34 per share today. Earnings grew about 50% in 2025, but we do not carry that forward. Our first year is well below 2025. Base case, $140.69 per share. Mid-cycle earnings of $8.34 a share continue, with no assumed growth in nitrogen prices or demand. We take about $0.50 a share off year one. A November 2025 incident idled all production at Yazoo City, and restart is not expected before the fourth quarter of 2026 at the earliest. The company expects about 9.5 million tons of gross ammonia output in 2026, against 10.1 million in 2025. Carbon capture at Donaldsonville started in July 2025 and earned about $42 million of federal 45Q tax credits in its first half-year. We add a full year of credits over the credits' 12-year life. We also include a smaller Yazoo City capture project due in 2028, which costs about $100 million to build. Blue Point is a $3.7 billion low-carbon ammonia plant in Modeste, Louisiana. CF owns 40%, JERA 35% and Mitsui 25%. It is due to start in 2029 with capacity of 1.4 million metric tons a year. CF still has to put in roughly $1.3 billion over 2026-2028. We assume CF's share of the output earns what its existing plants earn per ton in a middle-of-the-cycle year. On that assumption the project roughly pays back its cost at our 6% rate, so it adds little value in this case. The company has not disclosed expected returns, so the per-ton figure is our estimate. After year ten, earnings stay flat. The plants are kept running by the upkeep spending we already deduct, and steady volumes in 2023-2025 show that works. Bear case, $64.85 per share. The margin falls back to 2018-2020 levels for twenty years. That is about $866 million a year, or $5.63 a share, as U.S. gas gets more expensive: the Henry Hub price averaged $6.32 in early 2026, against $3.53 in 2025. Earnings then fade to nothing by year thirty, reflecting the carbon-pricing risk the company itself flags. Blue Point runs 30% over budget, since about a third of its cost is imported materials, and earns only 3%. There are no extra Donaldsonville tax credits. The U.K. business, written down in 2021, 2022 and again in 2025, adds no value. Debt of about $3.2 billion stays manageable even here. Low-point cash earnings are several times the $137 million of interest paid in 2025. Bull case, $200.05 per share. Earnings run at the 2023-2025 average of about $1.8 billion a year, or $11.70 a share. Those were the first years to include the Waggaman plant, bought in December 2023 for $1.2 billion. The Yazoo City outage does no lasting harm; first-half 2026 net earnings, before minority interests, were $1.55 billion against $0.84 billion a year earlier. Blue Point is finished on budget and earns at that stronger per-ton rate, and both capture projects collect tax credits. What the shares appear to be worth: about $140.69 in the base case, within a range of $64.85 to $200.05. The margin-of-safety price is $80.00. This is a commodity business whose earnings have swung from $3.62 to $19.07 a share in eight years, so the price carries a wide cushion against a long low period. At $80.00, mid-cycle earnings are about a 10% yield. The value would be wrong if U.S. gas stays expensive compared with global nitrogen prices for years, if the 45Q credits are cut back, if Blue Point costs far more than planned, or if more plants suffer long outages.