Yara (Buy, TP: NOK475.00) - Set for a good start to 2021
Yara reported a fairly in-line Q4, with adjusted EBITDA c5% above consensus. The most prominent beat was a USD2.3 DPS, c30% above consensus. With the strong nitrate price rally YTD, we have lifted our 2021e EPS by c27%. We have assumed prices will revert closer to the cost of production in 2022, and thus lifted our 2022e EPS by only 1%. We keep our BUY and have raised our target price to NOK475 (450) on the solid cash flow and DPS in Q4, with improved 2021e earnings prospects.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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