CF Industries (CF) could benefit from firm nitrogen prices, tight global supply, strong cash flow and ongoing cost improvements, though the US-Iran conflict could keep near-term results volatile, RBC Capital Markets said in a note Monday.

The investment firm expects nitrogen prices to stay high in the near term as Middle East supply remains limited, with further upside possible if tensions rise or demand improves in H2. RBC said US NOLA urea prices are expected at $489 per ton in 2026 and $413 per ton in 2027, compared with $399 per ton in 2025.

CF's efforts to improve margins, including higher-value low-carbon ammonia sales and changes at its Courtright and Yazoo City facilities, could support earnings over time, according to the note.

The investment firm expects strong cash flow in 2026 to give the company room for larger stock buybacks, while cash generation should remain solid from 2027 through 2029 as spending increases on the Blue Point project, which remains on track to begin construction in August, with required permits received in July and most long-lead items ordered, while modular construction is limiting labor-cost risks.

RBC kept its sector perform rating and $115 price target, saying it remains constructive on CF's longer-term outlook but expects near-term risks from the US-Iran conflict and potential downward earnings estimate revisions.

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