Yara is a global leader in nitrogen fertilizers and industrial ammonia, with scale, a global distribution network and a growing clean-ammonia/decarbonisation angle. Adjusted ROIC of 10.1% and +NOK 2.5B economic profit reflect a large, value-creating franchise, though margins swing with natural-gas (feedstock) costs and crop/fertilizer prices.
The reverse-DCF fair value brackets-to-above the price (NOK 541 at GDP vs NOK 509, NOK 563 at 5% growth) on a modest ~3% implied growth — fair-to-slightly-cheap for a cyclical with a decent ~6% free-cash yield and dividend.
Bridging adjusted NOPAT through net debt, reverse-DCF fair value runs NOK 518 (zero growth) to NOK 607 (10% growth) versus the NOK 509 price — fair-to-slightly-cheap, with the caveat that fertilizer is cyclical and current margins depend on the gas-cost/crop-price spread.
Base NOK 540 (+6%) on a normalised gas-cost spread plus the dividend; bull NOK 620 (tight nitrogen markets and low European gas costs widen margins); bear NOK 420 (weak crop prices or high gas costs compress the spread).
The market pays today’s enterprise value for roughly -13.6% NOPAT growth over 5 years. The business earns 12% on capital against a 8% cost of capital (spread +4.0 pp); the no-growth value is NOK 662/share (141% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 620 | -3% | +32% | 30% | Tight nitrogen + low European gas widen margins |
| Base | NOK 540 | -8% | +15% | 45% | Fair: normalised spread + dividend |
| Bear | NOK 420 | -18% | -11% | 25% | Weak crops / high gas compress the spread |
| Prob-weighted | NOK 534 | — | +14% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 935 | 1,024 | 1,087 | 1,186 | 1,257 | 1,447 |
| 7.25% | 777 | 842 | 888 | 959 | 1,009 | 1,140 |
| 8.00% (base) | 662 | 710 | 743 | 794 | 829 | 919 |
| 8.75% | 574 | 610 | 634 | 670 | 694 | 753 |
| 9.50% | 505 | 531 | 548 | 572 | 588 | 624 |
Green = fair value above the current price of NOK 470.10. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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Global leadership and distribution reach provide cost and market advantages.
Falling European gas costs widen nitrogen margins — a key earnings lever.
Decarbonisation/clean-ammonia projects add a long-dated growth and ESG angle.
A ~6% free-cash yield supports an attractive, if variable, dividend.
Higher crop prices lift farmer affordability and fertilizer demand.
Yara is a scale fertilizer franchise at a fair-to-slightly-cheap valuation with a decent dividend, but its earnings hinge on the gas-cost/crop-price spread. We rate it HOLD with a slight positive tilt, medium conviction; base target NOK 540 (+6%).
A weak-crop or high-gas pullback toward the low-NOK 400s, near the reverse-DCF floor, would offer a better cyclical entry.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
NOPAT adjustments: Not available from structured data
Company add-backs we reject: Not available without footnote extraction
Pages read — FY: — · Q: —
How the mttssn view has evolved — each prior dated note is preserved.