Report
Niclas Gehin
EUR 446.95 For Business Accounts Only

Yara (Buy, TP: NOK425.00) - Capex cuts set to boost dividends

We estimate Q2 EBITDA of NOK526m (results are due at 08:00 CET on 19 July). We believe Nutrien no longer pursuing its US clean ammonia project, citing higher costs and lower demand, should lower the likelihood that Yara goes through with its projects. We view reintroducing a generous dividend policy as a potential catalyst (2024e DPS of NOK25, or 8% yield), as its former capex projections are reduced. At a 2025e P/E of 9x on normalised earnings, we find the stock attractively valued and reiterate our BUY and NOK425 target price.
Underlying
Yara International ASA

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.

Provider
DnB Markets
DnB Markets

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.

 

Analysts
Niclas Gehin

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