Norsk Hydro (Buy, TP: NOK44.00) - Weak Q2 ahead
We forecast Q2 EBIT of NOK840m, up from NOK559 in Q1 but still at depressed levels as Alunorte’s restart has yet to have an impact. We are cNOK300m below consensus on underlying EBIT but note that the uncertainty is high in the aftermath of the Alunorte curtailment. As the stock is trading at close to an all-time discount to our SOTP we reiterate our BUY recommendation and NOK44 target price.Norsk Hydro is an aluminium group based in Norway. Co. is engaged in the supply of aluminium and aluminium products. Co. supplies casthouse products, such as extrusion ingots, sheet ingots and foundry alloys. Co's customers are active in sectors such as the packaging, lithographic, building, automotive and transport sectors. In addition, Co. is engaged in the production of power in Norway. Its business is divided into six operating segments: Bauxite & Alumina, Primary Metal, Metal Markets, Rolled Products, and Energy and Other and Eliminations.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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