Citigroup raises price targets for Terra, CF

12 January 2007 17:49  [Source: ICIS news]

TORONTO (ICIS news)--Citigroup has raised its share price targets for US fertilizer makers Terra and CF Industries on the back of strong nitrogen prices and large margins, the analysts said in a research note made available on Friday.

Citigroup raised its price target for Terra to $17.00 (€13.09)/share, from $13.60, and for CF to $33.00, from $26.00.

Terra’s shares were priced at $13.02/share, up 9%, and CF was priced at $28.50, up 2.9%, in early Friday afternoon trading in New York.

The analysts said nitrogen prices should remain high while natural gas feedstock prices are coming down. These trends are translating into bigger margins for the two fertilizer firms.

US nitrogen is tight because of years of capacity shut-ins and a heavy reliance on imports, the analysts said. Meanwhile, demand growth is forecast to reach up to 10% in 2007, they added.

On the demand side, Terra and CF are also benefiting from the many new US ethanol plants that use fertilizer intensive corn as feedstock, the analysts said.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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