Norsk Hydro (Sell, TP: NOK55.00) - Q1 shipments delayed to Q2

Norsk Hydro’s Q1 results fell somewhat short of market expectations (EBITDA 4% below consensus) and it cut its Extrusions guidance. A large share of the miss appears to reflect late shipments in the bauxite and alumina (B&A) segment following heavy rainfall, which should mean higher volumes in Q2. We have made only minor changes (-1–0%) to our 2026–2027e EPS. We continue to see downside risk to aluminium prices, and reiterate our SELL and NOK55 target price.

Muted estimate changes

Weak deliveries and higher cost

Heads-up for Q1 report 29 April

Trade war will hurt demand

Norsk Hydro (Sell, TP: NOK55.00) - Aluminium defying fundamentals

We reiterate our SELL and NOK55 target price, as we believe consensus EPS and aluminium price expectations are too high. We have seen aluminium prices outperform coal prices by 40% since the summer, defying the fundamental relationship where aluminium prices have been set by its cost of production for the past 15 years. We do not believe a balanced global supply/demand situation is likely to break this correlation. We have reduced our 2026–2027e EPS by 3% due to a stronger NOK versus USD. We est...

Norway: Best ideas Q1'25

Estimates up, share down — for how long?

Norsk Hydro (Sell, TP: NOK55.00) - Soft result in strong market

The Q4 headline results were weaker than consensus and our forecasts, and the proposed 2024 DPS of NOK2.25 was down 10% YOY despite record-strong alumina markets, with aluminium prices at cUSD2,600/t. We still expect aluminium prices to fall towards USD2,200/t as markets remain balanced while input energy costs decline globally, together with weak demand for downstream products. We have raised our 2025e EPS by 7% on high alumina and aluminium prices going into 2025 and 2026e by 1%. We reiterate ...

Underlying inline and cost coming down

Heads-up for report 14 February

Mr. Market too pessimistic?

Norsk Hydro (Sell, TP: NOK55.00) - Downside risk for aluminium prices

We expect EBITDA of NOK8.5bn, boosted by high alumina prices. We reiterate our SELL and NOK55 target price, as we believe aluminium prices of USD~2,700/t have been driven higher by speculation rather than fundamentals. Prices are inflated by high alumina prices, which should come down as more supply enters the market. Furthermore, we believe higher copper prices will not lead to higher aluminium prices for much longer, as the two metal prices do not share fundamentals. We have raised our 2025e E...

Limited incremental news

CMD next week

How long will it last?

Beat on cost, but cost will come back in Q4

Norsk Hydro (Sell, TP: NOK50.00) - Aluminium is not a scarce resource

We reiterate our SELL and NOK50 target price, as we expect aluminium prices to return to a fundamentals-backed level of ~USD2,200/t soon. Aluminium prices – in line with copper – have surged twice this year, but we stress that aluminium is not set to become a scarce resource – as may be the case for copper. Copper is a mined metal where the possibility of scarcity has led to a price surge of ~400% since 2000, while aluminium prices have been largely flat in the same period as bauxite is abundant...

Upstream strong, downstream weak

Norsk Hydro (Sell, TP: NOK50.00) - Small EBITDA miss and cost creep

In a soft Q2, EBITDA missed consensus by 5%. The main negatives were higher fixed costs (up NOK300m QOQ) as well as muted downstream demand and results. We have reduced our 2025–2026e EPS by 1% on higher fixed costs. We reiterate our SELL and NOK50 target price as we expect aluminium prices to fall back towards USD2,200/t, with no fundamental support for the recent bounce.