Analysts Lost In (Norwegian) Woods

It is quite a mystery. How can professional analysts at some of the worlds leading financial institutions end up with completely different view’s on the exact same company? Even thou the company is the worlds largest in their branch? Have a look at this.

Agilis Færder Securities: “STRONG BUY” (October 30th. 2009)

Nordea Bank: “SELL” (October 15th. 2009)

Next Tuesday the Norwegian Yara International ASA presents its final result for 2009, and the figures of fourth quarter last year. What the report will look like is obviously anybody’s guess.

Yara International ASA is a global firm specializing in agricultural products, and is the world’s largest supplier of mineral fertilizers.

The Oslo-based company has more than 8,000 employees and annual revenues of nearly NOK 90 billion with operations in more than 50 countries.

Yara International has a total share of 8% in the fertilizer market, with a goal to reach 10% over the next years.

2009 was a very turbulent year for the Norwegian company. After a lousy result in second quarter, Yara came back strong i third quarter, however below expectations.

At the company’s Capital Markets Day on December 10th., the CEO Jørgen Ole Haslestad descibed the situation like this:

“The escalation of the financial turmoil during third quarter 2008 brought the positive market development to a sudden end. Drops in deliveries and fertilizer prices during second half of 2008 were unprecedented.”

“Deliveries during 2009 partly picked up, but have til November continued to be subdued due to pipeline effects and higher customer risk aversion.”

“The drops were biggest for phosphate and potash where farmers short term can mine the soil, and particularly for potash where prices have not come down to levels reflecting today’s demand situation.”

“Nitrogen prices in 2009 have in an oversupplied market reflected marginal production costs in Eastern Europe and China export cost giving Yara a cost advantage as Western European spot gas prices have developed favorably.”

“Yara’s 2009 results have also been impacted by inventory write-downs and position effects as prices declined.”


Guiding at Status Quo

Still, according to Mr. Haslestad, Yara expects a result in 2009 in line with the numbers of 2008.

That is:  EBITDA of NOK 9 000 million.

The fertilizer producer expects an Earning Per Share (EPS) of NOK 14,0 in 2009 – compared to NOK 15,0 the year before.

Here’s the full presentation from Yara International’s Capital Markets Day.

Here’s the Q3 report.

Analysts In The Woods

Anyway – the top analysts have completely different views on the company, as reflected in their recommendations listed below:

Arctic Securities: “STRONG BUY” (May 5th.)

Credit Suisse: “BUY” Price Target NOK 250 (September 14th.)

Carnegie: ” SELL” Price Target NOK 165 – 170 (September 22th.)

Argo Securities: “BUY” (September 23th.)

SEB Enskilda: “SELL” Price Target NOK 170 (September 24th.)

Fondsfinans: “BUY” Price Target NOK 210 (September 30th.)

Nordea Markets: “SELL” Price Target NOK 120 (October 15th.)

Morgan Stanley: “EQUAL WEIGHT” (October 15th.)

Credit Suisse: “OUTPERFORM” Price Target NOK 260 (October 21th.)

Normura: “NEUTRAL” Price Target NOK 220 (October 21th.)

S&P Equity: “HOLD” Price Target NOK 214 (October 21th.)

Arctic Securities: “MARKET PERFORM” (October 21th.)

Argo Securities: “REDUCE” Price Target NOK 195 (October 21th.)

Pareto: “BUY” Price Target NOK 250 (October 21th.)

Citigroup: “HOLD” Price Target NOK 200 (October 21th.)

Citigroup: “BUY” (November 16th.)

Agilis Færder Securities: “STRONG BUY” Price Target NOK 262  (October 30th.)

Bank of America: “BUY” Price Target NOK 275 (December 1th.)

Goldman Sachs: “BUY” Price Target NOK 278 (December 2th.)

Deutsche Bank: “BUY” Price Target NOK 275  (December 3th.)

UBS: “NEUTRAL” (December 7th.)

Place Your Bets

The stock closed at NOK 242,1 Tuesday – up 1,72%

Over the last 12 months Yara has gained 35%, but is down 11,4% over the last four weeks.

Here’s the chart – compared to the Oslo Stock Exchange Benchmark Index (Red Line):

Yara International ASA’s fourth quarter 2009 results will be released on Tuesday 16 February 2010. The results will be available at http://www.yara.com and in the reception at Bygdøy alle 2, Oslo from 08:00 CET.

The results will be presented at 09:30 CET by President and CEO Jørgen Ole Haslestad and CFO Hallgeir Storvik. The presentation will take place in the Auditorium in Bygdøy alle 2 and will be webcast at http://www.yara.com. The presentation will be held in English.

So, Ladies and Gentlemen; it’s still time to pick a number and place your bets.

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0 thoughts on “Analysts Lost In (Norwegian) Woods

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