Dahlman Rose Reiterates Hold Rating on CF Industries (CF)

Dahlman Rose & Company is out with a research report this morning, where it reiterates its Hold rating on CF Industries CF; it did not provide a price target for the stock. The analysts cited the company's recently release quarterly earnings results, which were below estimates due to lower than expected volumes and pricing, but was helped by a lower than expected tax rate. The Nitrogen segment delivered 3 MM tons of product, missing their 3.3 MM ton estimate due mostly to lower industrial ammonia sales as the company chose not to renew some large industrial contracts to optimize business mix and margins. The analysts said, “Based on our revised estimates, CF shares trade at a 2011 P/E and EBITDA multiple of ~13x and ~7x (~12x and ~6x based on consensus 2011 EPS and EBITDA estimates of $10.75 and $1.8 billion) versus a peer group average of ~18x and ~10x. While we favor CF shares and the nitrogen complex over the other nutrients, we have maintained our Hold rating as we see the risk/reward relatively balanced at current levels.”