MW It's time to sell this fertilizer stock that's been the S&P 500's top gainer, analyst says

By Tomi Kilgore

The impact of the Middle East conflict on fertilizer prices and CF Industries' stock has been overdone, which makes a pullback likely, according to Mizuho

Mizuho turned bearish on CF Industries' stock, saying it has rallied too much since the Iran conflict started.

Shares of CF Industries Holdings were taking a hit in early Wednesday trading, as Mizuho analyst Edlain Rodriguez turned bearish on the fertilizer company, basically saying enough is enough.

CF's stock $(CF)$ has been on a tear since the Iran conflict began. It has soared 23.9% in March to make it the S&P 500 index's SPX top gainer this month. The reason is that the Middle East accounts for as much as roughly 40% of global fertilizer exports, which is a bigger percentage than crude oil. So as the conflict started, urea fertilizer prices were actually rising faster than oil prices.

But urea prices have started to stabilize, and CF's stock has pared some gains after closing at a record high of $136 on March 12.

On Wednesday, the stock slumped 2.8% in premarket trading, after Mizuho's Rodriguez lowered his rating to underperform from neutral. He believes the stock has already captured, and overplayed, the surge in fertilizer prices, which means the risks of a selloff now outweigh the potential for further gains.

"We now believe the risk/reward is more skewed to the downside," Rodriguez wrote in a note to clients. "Our view is that the surge in nitrogen prices is not long-lasting and prices will come down once the conflict ends." Nitrogen is a key fertilizer ingredient.

His $100 stock-price target implies 19% downside from Tuesday's closing price of $123.29.

Also read: Why your fertilizer could cost more because of the Iran conflict

It's understandable that CF's stock surged after the start of the conflict, because the company is a "pure-play" nitrogen producer, and farmers have no option but to use nitrogen if planting corn, Rodriguez wrote. But he believes the impact on farming won't be as dramatic as the stock's rally suggests, since most U.S. farmers have already paid for their nitrogen needs for the upcoming planting season.

"As we don't believe the surge in nitrogen prices is long-lasting, and prices should come down once the conflict ends, short-term earnings boost won't flow into 2027," Rodriguez wrote.

For one, he hasn't seen any evidence of any permanent damage to nitrogen plants in the Middle East. And using Russia's invasion of Ukraine in 2022 as a guide - and that war is ongoing - he believes any benefits from the higher prices to CF's earnings will be contained in the second and third quarters.

Since the Iran conflict started, the average estimate for 2026 earnings per share among analysts surveyed by FactSet has increased to $9.16 from $8.21.

Despite the stock's rally, Wall Street hasn't been completely on board. Of the 22 analysts surveyed by FactSet who cover the company, only four are bullish, while 14 are neutral and four, including Rodriguez, are bearish.

The average stock-price target of analysts surveyed is $107.35, or 13% below the latest closing price.

-Tomi Kilgore

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March 18, 2026 09:26 ET (13:26 GMT)

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