Yara (Buy, TP: NOK450.00) - Industrial division staying for now
Yara reported a solid Q1 EBITDA beat versus our estimate and consensus, while reported EPS missed. Adjusting for currency effects and tax asset write-downs, however, underlying EPS of NOK0.65 outperformed consensus by ~30%. Yara said it no longer plans to IPO its Industrial division, partly due to the market environment following the Covid-19 outbreak, but will instead separate it from the rest of the group. We have raised our 2021e EBITDA by 3% after Q1. Following a change of analyst, we reiterate our BUY and NOK450 target price as we find an EV/EBITDA 2021e of 4.4x in a defensive name to be compellingYara 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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