Norsk Hydro (Hold, TP: NOK80.00) - Aluminium prices down from peak
We expect Q1 EPS of NOK2.9 (results due 07:00 CET on 3 May). We believe aluminium prices will fall from the recent USD3,500/t peak towards USD3,000/t in 2022, converging towards USD2,600/t in 2024 as global supply outgrows demand, at the same time as Chinese coal futures prices point to levels of USD120/t. We have raised our 2023–2024e EPS by a modest ~4%, and reiterate our HOLD and NOK80 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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