Deutsche Bank upgraded Yara International to 'buy' and raised its price target to NOK451. Analyst Tristan Lamotte argues the market is overly cautious, ignoring stronger fundamentals in nitrogen fertiliser and agriculture. The move follows a valuation gap where Yara's multiple fell while earnings estimates rose, suggesting the stock is undervalued relative to its earnings outlook.

The core argument centers on Yara's valuation. Shares trade at 5.2x 2026 EV/EBITDA, a 20% discount to its 15-year average and a 15% discount to rival CF Industries. Historically, Yara trades at only a 2% discount, so this gap is substantial. The bank also sees value in potential carbon credit sales worth about $500 million.

Market sentiment has been weighed down by fears of over-earning in 2025 followed by a sharp 2026 normalisation. Deutsche Bank dismisses this as too pessimistic, endorsing management's strategy. The stock also offers a hedge against geopolitical risk, given Iran's 9% share of global urea exports. Investors should watch for the nitrogen market to validate this bullish thesis.