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On Tuesday, Deutsche Bank (ETR:DBKGn) analysts updated their outlook on Yara International ASA (YAR:NO) (OTC: OTC:YARIY), increasing the price target from NOK340.00 to NOK357.00 but maintaining a Hold rating on the stock. This adjustment comes in response to the bank’s revised forecast for the company’s first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA). The stock has shown strong momentum this year, with a 19.79% YTD return and is currently trading near its 52-week high of $16.71. According to InvestingPro data, the company has maintained dividend payments for 21 consecutive years, demonstrating consistent shareholder returns.
In a recent statement, Deutsche Bank highlighted the reasons for the raised price target, citing a 5% increase in their Q1 EBITDA estimate to $545 million. This is attributed to a combination of higher fertilizer prices, favorable foreign exchange rates, and cost savings. However, they also noted that these positive factors might be partially negated by rising energy costs. With a current market capitalization of $8.16 billion and last twelve months EBITDA of $1.56 billion, InvestingPro analysis suggests the company maintains a fair financial health score.
Analysts at Deutsche Bank anticipate a 25% year-over-year increase in Yara International (OL:YAR)’s Q1 EBITDA, which is also 5% higher than the previous quarter and 7% above the Bloomberg consensus. They expect the company’s EBITDA margin for the quarter to reach 15.4%, a slight improvement from the fourth quarter of 2024, due to wider spreads in prices.
While Yara International does not provide quantitative guidance, Deutsche Bank expects the company to continue emphasizing the anticipated deceleration in urea supply growth starting from 2025. Additionally, the company is predicted to offer guidance on energy costs for the second and third quarters of 2025.
In light of these factors, Deutsche Bank has also raised its EBITDA forecasts for Yara International for the years 2025-2026 by 5-6%. This increase is based on expectations of higher sales and margins, reflecting the uptrend in fertilizer prices.
In other recent news, Yara International ASA experienced a notable change in its stock rating. BNP Paribas (OTC:BNPQY) Exane analyst Laurent Favre upgraded Yara’s rating from Underperform to Neutral, while also raising the price target from NOK300.00 to NOK305.00. This upgrade was influenced by improved agricultural fundamentals, though uncertainties around blue ammonia remain a concern. The analyst highlighted that recent positive developments in agricultural markets, such as increased crop prices and nitrogen fertilizer spreads, have prompted revised EBITDA forecasts for Yara. The new estimates for 2025 and 2026 are $2,093 million and $2,173 million, respectively, which are slightly below the Bloomberg consensus. Additionally, BNP Paribas Exane’s free cash flow estimates for Yara are $183 million for 2025 and $562 million for 2026, translating to a free cash flow yield of 3% and 8%. These estimates do not factor in potential increased capital expenditures for U.S. blue ammonia projects, which may reach final investment decisions by the first half of 2026.
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