Norsk Hydro (Sell, TP: NOK50.00) - Back to fundamentals-based prices
Our Q2 EBITDA forecast of NOK7.6bn is based on higher aluminium prices (results due at 07:00 CET on 23 July). However, as we do not believe the recent bounce was founded on fundamentals, after Q2 we estimate prices to decline towards USD2,200/t, as seen in March. Norsk Hydro’s NOK64 share price reflects too-optimistic aluminium prices, in our view, and we reiterate our SELL and NOK50 target price. We have raised our 2025–2026e EPS by 5% to account for higher alumina prices.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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