Yara (Buy, TP: NOK425.00) - Looking to cut costs and capex
Q2 EBITDA beat consensus by 14%. With the results, management announced plans to cut costs and capex by USD150m (the former would equate to ~12% of consensus 2026e PTP). Our capex estimates were already below the previous guidance of USD1.3bn per year, so we have not made any changes. However, we have raised our 2025–2026e EPS by 3%, expecting only parts of the cost cuts to materialise. We continue to find Yara attractively valued at a 2025e P/E of 9x and 10% dividend yield. We reiterate our BUY and NOK425 target price.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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