Norsk Hydro: Analysts’ Ratings amid Higher Aluminum Prices



Norsk Hydro

Norsk Hydro (NHY) released its 3Q17 earnings on October 25. The company reported revenues of 22.8 billion Norwegian krone (~$2.8 billion) in the quarter—compared to 24.6 billion krone (~$3.0 billion) in 2Q17 and 20.1 billion krone (~$2.5 billion) in 3Q16. Norsk Hydro generated an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of 3.9 billion krone (~$480 million) in 3Q17. To put this in context, it generated an EBITDA of 4.3 billion krone (~$530 million) in 2Q17 and 2.7 billion krone (~$330 million) in 3Q16. The company’s 3Q17 earnings were lower than analysts’ forecast.

Analysts’ recommendations

According to consensus estimates compiled by Thomson Reuters, Norsk Hydro has a mean one-year target price of 62.69 krone, which represents 1.8% downside over its closing price on November 7. In contrast, the stock carried a one-year target price of 60.95 krone on October 24—one day before its earnings release.

Some of the analysts raised Norsk Hydro’s target price after its 3Q17 earnings. Credit Suisse raised Norsk Hydro’s target price from 70 krone to 72 krone, while Morgan Stanley raised the stock’s target price from 59 krone to 64 krone. JPMorgan Chase also raised Norsk Hydro’s target price from 58.50 krone to 61.50 krone after its 3Q17 earnings. Among other aluminum producers (RIO) (SOUHY), while analysts raised Alcoa’s (AA) target price after its 3Q17 earnings, they lowered Century Aluminum’s (CENX) target price.

Out of the 22 analysts polled by Thomson Reuters on November 7, nine rated Norsk Hydro as a “buy” or higher, while two analysts gave it a “sell” rating. The remaining 11 analysts gave the stock a “hold” rating.

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