Shares of CF Industries Holdings (NYSE:CF) fell about 3% on Wednesday morning after Mizuho lowered its rating on the fertilizer producer, warning that the stock’s recent rally may have gone too far.
Mizuho analyst Edlain Rodriguez downgraded the shares to Underperform from Neutral and set a price target of $100, well below Tuesday’s closing price of $123.40. CF Industries has climbed sharply in recent months, gaining roughly 24% since the start of March after rising 29% during January and February.
“Following a huge run-up in fertilizer stocks so far this year, we are downgrading CF Industries (the nitrogen company) to Underperform from Neutral as we believe the big gains from the surge in oil and fertilizer prices due to the Middle East conflict have likely already been captured (and overdone),” Rodriguez commented.
The analyst increased the price target slightly to $100 from $95 to account for a short-term boost to earnings and an expected reduction in net debt by 2026. However, Rodriguez cautioned that the recent spike in nitrogen prices may prove temporary, with prices likely to retreat once tensions in the Middle East ease.
Mizuho estimates the stock could face roughly 15% downside from current levels and expects earnings projections for 2027 to remain unchanged, suggesting that the recent rally may be largely driven by short-term factors.