Challenging backdrop

Elkem (Buy, TP: NOK30.00) - Performing through the trough

We estimate Q1 EBITDA of NOK983m, driven by near-term margin improvement in Silicones, partly offset by our lowered expectations for Silicon due to still-weak market conditions, along with additional headwinds from production curtailments and maintenance work. We have reduced our 2026–2027e EPS by 3%. We reiterate our BUY and NOK30 target price.

Elkem (Buy, TP: NOK30.00) - Preparing to unlock values

Q4 EBITDA was cNOK1.2bn, in line with our estimate and consensus. The company proposed a DPS of NOK0.3 for 2024, which was above our forecast of NOK0 and consensus of NOK0.09. We have made minor adjustments to our 2025–2026e EPS, and are 6% above consensus for 2026e EPS. We reiterate our BUY and NOK30 target price.

Elkem (Hold, TP: NOK30.00) - Preparing to unlock values

Q4 EBITDA was cNOK1.2bn, in line with our estimate and consensus. The company proposed a DPS of NOK0.3 for 2024, which was above our forecast of NOK0 and consensus of NOK0.09. We have made minor adjustments to our 2025–2026e EPS, and are 6% above consensus for 2026e EPS. We reiterate our BUY and NOK30 target price.

Q4 above, Q1 likely weaker

Q4 EBITDA in-line

Elkem (Buy, TP: NOK30.00) - Back to its roots

We have upgraded Elkem to BUY (HOLD), as we see upside potential from a possible divestiture of the Silicones business, following its announced strategic review. We believe the Silicon Products and Carbon Solutions divisions could be worth cNOK20bn, in addition to the potential cash consideration for Silicones. Cash returns should come up with sharply lower capex. In our opinion, the main risk is the divestment not materialising. Our Q4e EBITDA is NOK1.2bn, and we have raised our target price to...

Q4e: Silicones up, Silicon materials down

Silicones better in Q3, Q4 likely a repeat

Q3 EBITDA 14% better

Elkem (Hold, TP: NOK22.00) - Silicones overcapacity still an issue

We expect group Q3 EBITDA of NOK1,078m (4% below consensus), including NOK140m from Silicones, driven by smaller improvements in the European market. However, given overcapacity in silicones, weak end-market demand and muted commodity prices, we do not expect a material earnings boost in the coming years. We reiterate our HOLD and NOK22 target price. The Q3 results are due at 07:00 CET on 24 October.

Silicones up, carbon down

Q3e EBITDA of NOK +1.05bn, Q4 likely flat. DMC challenging, but 10% price hike. Valuation still depressed: EV/CE of 0.60x vs. peers at ~2.0x.

10% price hike - could lift EBITDA by NOK 500m

A Q2 beat and a 10% price hike from Shin-Etsu

Q2 EBITDA 2% better, Q3e likely flat q-o-q at NOK 1bn. 10% price hike from Shin-Etsu, but no fun in DMC. Valuation still depressed: EV/CE of 0.65x vs. peers at 2.5x. BUY.

Elkem (Hold, TP: NOK22.00) - Large one-off drives positive result

Q2 EBITDA was NOK1,030m, 3% below our estimate and 1% above consensus. EPS beat expectations on deferred tax assets of NOK1,067m from the REC Solar Norway acquisition (some 7% of current market cap). We remain unexcited about the price outlook in Silicon Products and Silicones, and reiterate our HOLD, but have raised our target price to NOK22 (20) on the back of the NOK1.1bn deferred tax asset reported in Q2.

EBITDA 2% better, Q3 likely NOK 1bn

Q2e better than Q1, and a 10% price hike

Elkem (Hold, TP: NOK20.00) - Dependent on supply

We forecast Q2 EBITDA of NOK1,057m, up 2% YOY, driven by a slight improvement in Silicones’ margins. Despite lowering our 2024–2025e Si and FeSi prices by 1–4% due to a decline in silicon metal prices over past months, we have raised our 2025–2026e EPS by 2% on improvements in Silicones and Carbon Solutions. We reiterate our HOLD and NOK20 target price, as we continue to see challenging conditions due to excess supply of silicones with depressed prices. The results are due at 07:00 CET on 12 Jul...

Leading indicators

OECD: The indicator points up from a low level. US: The indicator points up (housing starts, monetary policy, interest rates, real FX). EU: The indicator points up from a low level (bond yields, stock market). Japan: The indicator is neutral (monetary policy, housing starts).

Elkem (Hold, TP: NOK20.00) - Muddling through

Q1 EBITDA was largely in line with our forecast and consensus, while EPS took a hit from derivative losses. We have reduced our 2025–2026e EPS by 6% and our target price to NOK20 (22). Although the balance sheet looks fragile at a NIBD/EBITDA of 3.5x and ICR of 4.2x, we believe higher silicon prices should pull it into healthier territories from Q2. However, we have cut our 2024–2025e DPS to zero. We reiterate our HOLD as we expect the silicones market to continue to struggle with overcapacity, ...