Yara (Buy, TP: NOK425.00) - Ending a bad year on a good note
After missing consensus for three consecutive quarters, Q4 beat our forecast and consensus on EBITDA by cUSD200m, primarily on higher price achievement. Yara also sees solid demand into 2024, supported by rising fertiliser prices and lower natural gas prices. We have raised our 2024–2025e EPS by 3–4% on the Q4 beat, and reiterate our BUY and NOK425 target price. With urea prices at USD380/t and EU production costs of USD254/t, we believe Yara is set for a significant YOY EBITDA uplift in 2024, after Europe was the marginal cost producer throughout 2023.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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