Yara (Buy, TP: NOK420.00) - Limited 2019–2020 estimate changes
We consider Yara’s Q1 results fairly neutral, as the delivery shortfall should be recovered in Q2 or 2019. We have made marginal 2019–2020 estimate changes but we have cut our 2018e EBITDA by 4% on lower deliveries, higher gas costs, and plant turnarounds. Trading at a low 9.4x our 2020e EPS, we reiterate our BUY and NOK420 target price. We expect Q2 to be a positive catalyst thanks to higher sales and solid cost performance.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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