Yara (Buy, TP: NOK600.00) -
We forecast solid Q1 EPS of USD2.8 (results due at 08:00 CET on 27 April), driven by high fertiliser prices, only partly offset by elevated natural gas and ammonia prices. Historically, high crop prices have fuelled earnings at Yara; the recent spike in crop prices (wheat and corn up ~60–80% YOY) has translated into record-high fertiliser prices, but we believe without hurting volumes too much (we forecast 17% lower volumes YOY in Q1). We have lifted our 2023e EPS by 28% as crop prices look set to remain high, and in turn our target price to NOK600 (575), and reiterate BUY.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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