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On Tuesday, Deutsche Bank (ETR:DBKGn)’s analyst Tristan Lamotte increased the price target for Yara International ASA (YAR:NO) (OTC:YARIY) to NOK 370, up from NOK 357, while keeping a Hold rating on the stock. The adjustment follows Yara International (OL:YAR)’s first-quarter results, which have led to a revision of the company’s earnings forecasts.
Lamotte’s updated model anticipates a 9% rise in the company’s EBITDA forecast for 2025 and approximately a 4% increase for the years 2026-27. This positive adjustment is primarily attributed to the expectation of sustained higher fertilizer prices, which are projected to more than compensate for the anticipated rise in energy costs.
The bank now predicts that Yara International’s EBITDA for the second quarter of 2025 will reach $700 million, marking a 10% quarter-over-quarter increase and standing 26% above the Bloomberg consensus. For the full year of 2025, Deutsche Bank forecasts an EBITDA of $2,600 million, which is 11% higher than the pre-results consensus from InFront.
Yara International’s current valuation reflects a trading multiple of 4.5 times the estimated EBITDA for 2025. Historically, the company’s EBITDA multiple has fluctuated between 3 and 10 times over the past decade. Additionally, the stock is valued at 8.7 times the projected earnings for 2025 and offers a free cash flow yield of 7.6% for the same year. In comparison, CF Industries (NYSE:CF) trades at 7.6 times its estimated 2025 EBITDA and has a projected free cash flow yield of 10.3% for 2025.
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