Norsk Hydro (Sell, TP: NOK55.00) - Consensus too optimistic on 2025e
We are 20% below consensus on 2025e EPS, as we believe declining global energy prices will push aluminium prices down further, and not up as consensus estimates. Non-core earnings, which we highlighted to be NOK8bn per year 12 months ago, have shrunk to NOK3.5bn, and we believe they will decline further. We have trimmed our 2024–2025e EPS by 1–2%, and reiterate our SELL and NOK55 target price. We estimate Q4 EPS of NOK0.8 and a 2023e DPS of NOK2.8 (results due at 07:00 CET on 14 February).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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