Deutsche Bank adjusted its recommendation on Yara International ASA (OL:YAR) on Thursday, lowering the rating from Buy to Hold while simultaneously increasing its price target to NOK 484 from NOK 451. The change reflects the bank's view that recent share price appreciation has narrowed the upside and created a more even risk-reward profile for the fertilizer producer.
The downgrade follows a roughly 13% rise in Yara's share price since Deutsche Bank's prior upgrade. Despite maintaining a constructive stance on Yara's underlying growth strategy - including projects with Air Products - the bank concluded that the current market valuation already captures much of the company's near-term opportunity set.
Earnings outlook
Deutsche Bank raised its 2026 EBITDA forecast for Yara by 11%. The bank said the upgrade was driven principally by expectations that higher fertilizer prices will persist longer than previously assumed, together with slightly lower energy costs. Those factors more than offset the bank's reduced assumptions for volumes.
The new 2026 EBITDA projection stands at $2,989 million, which Deutsche Bank says represents a 7% year-over-year increase and sits 9% above the pre-results company-compiled consensus. For the first quarter of 2026, the bank now forecasts EBITDA of $850 million - up 33% year-over-year, 12% above Bloomberg consensus and 14% higher than Deutsche Bank's prior estimate.
Deutsche Bank also increased its EBITDA forecasts for 2027 and 2028 by 2-3%.
Market reaction and valuation
Prior to the rating adjustment, Yara shares closed at NOK 457.30. Deutsche Bank's new price target of NOK 484 implies a potential upside of 5.8% from that closing price. The rise in the target price was attributed to average earnings-per-share upgrades of 7.7%.
Balance of views
Although Deutsche Bank retains a favorable view of Yara's strategic initiatives, including collaborations with Air Products, the bank judged that the speed and scale of the stock's recent move have reduced the margin for further near-term gains relative to the risks. As a result, the recommendation was shifted to Hold while the bank's earnings projections were nudged higher.