Yara (Buy, TP: NOK420.00) - Forget about 2017
Q4 provided an EBITDA miss, soft DPS, higher 2018e capex, and an in general weak end to a weak year. The CMD, however, was a positive event supporting our case of higher savings potential from the improvement programme and tighter urea markets. We have lowered our 2018e EBITDA by 6% and our target price to NOK420 (430) to reflect slower earnings growth. We keep our BUY recommendation as we still forecast EPS to more than double from 2017 to 2020e.Yara International is a holding company. Through its subsidiaries, Co. converts energy, natural minerals and nitrogen from the air into products for farmers and industrial customers. Co. provides mineral fertilizers, industrial products and environmental products and services to its customers. Its mineral fertilizer portfolio, sold as five main brands (YaraMila, YaraLiva, YaraVita, YaraBela, YaraVera) represents a range of crop nutrients. Its industrial portfolio contains a range of nitrogen chemicals as well as CO2 and dry ice. Its environmental product and services reduce NOx emissions, control unpleasant odor, prevent toxic gases, avoid corrosion and improve water quality.
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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