Norsk Hydro (Hold, TP: NOK80.00) - Soft Q4 earnings, aluminium rising
A somewhat soft Q4 included slight earnings misses in Primary Aluminium and Extruded Solutions. However, we have lifted our 2023e EPS by 8% and our target price to NOK80 (70) on higher energy prices globally, and Australian futures coal prices of USD150/t suggesting aluminium prices could converge towards USD2,600/t. Nonetheless, we reiterate our HOLD as we believe Norsk Hydro’s current share price reflects our longer-term USD2,600/t aluminium price and ~NOK7.5 run-rate EPS.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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