Report
Niclas Gehin
EUR 443.76 For Business Accounts Only

Yara (Buy, TP: NOK450.00) - Hurt by poor sales timing again

The Q3 results were weaker than expected, with a 38% EBITDA miss, mainly due to sales occurring at the beginning of the quarter, when prices were low, resulting in a 10% price discount to the list prices assumed by us and consensus. While Yara’s business model seems vulnerable to price fluctuations, with several straight quarters of misses, we do not extrapolate much of this miss to our 2024–2025e EPS, which are down only 3–4%. We still find the valuation attractive at 9x more normalised earnings in 2024e and reiterate our BUY, while we have lowered our target price to NOK450 (475).
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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