CF: Terra Integration Appears Ahead Of Plan

Analysts at Dahlman Rose maintain their "buy" rating on CF Industries Inc CF. The target price for CF is set to $100. According to Dahlman Rose, “CF reported adjusted 2Q10 earnings of $2.51, missing our estimate and consensus of $3.25 and $2.97 respectively. The earnings miss was due partly to lower DAP sales volumes along with higher operational costs; however, the nitrogen segment reported better gross margins versus our expectation driven by better volume and prices. The balance of the underperformance was due to several below the line charges including: 1) higher D&A 2) higher interest costs, 3) higher tax rate, and 4) higher minority interest. Adjusted EBITDA of about $435MM met expectations driven mostly by better nitrogen volumes and pricing.” “Management noted that they now expect Terra synergies to exceed their previous targeted range of $105MM-$135MM. We look for total synergies to range between $150MM-$175MM, including manufacturing efficiency gains and improving use of the KeyTrade relationship,” the analysts add. More Analyst Ratings here