Yara (Buy, TP: NOK550.00) - Stability with a price rally on top
We expect Yara to report Q2 EPS of USD1.5 (report due at 07:30 CET on 16 July), reflecting elevated fertiliser prices that are only partly reduced by higher EU natural gas prices. We have lifted our 2021–2023e EPS by 7–9% on our higher CAN and urea price expectations, only partly offset by rising European natural gas prices. We have raised our target price to NOK550 (500) and reiterate our BUY. We like the combination of Yara’s defensive attributes and stable dividend/buy-back yield of 7% while Yara is positioned to benefit from continued inflationary pressure and elevated raw material prices.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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