Norsk Hydro (Hold, TP: NOK60.00) - Market suggesting this cannot last
We expect Q2 EPS of NOK1.4, reflecting strong aluminium prices and continued solid results in Bauxite and Alumina, as well as the Extruded Solutions segment. We have lifted our aluminium price forecasts from USD2,200/t to USD2,400/t for the remainder of 2021, and from USD2,100/t to USD2,150/t for 2022–2023, to reflect the increased coal prices (RMB700–900/t). We have raised our target price to NOK60 (55) on our positive EPS estimate revisions, but reiterate our HOLD, as we believe the market is still reluctant to price in any further potential raw material price hikes.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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