The pandemic has severely hit Dyno Nobel Americas’ ammonium nitrate volumes with the impact most pronounced in coal/metals markets.
Base and precious metals volumes were impacted by mine closures in Canada while iron ore production was cut due to reduced US steel demand. US coal markets were impacted by the significant drop in gas prices.
Incitec Pivot highlights base and precious metals volumes are recovering along with the recent increase in the US gas price hinting a recovery in coal volumes.
The broker notes Incitec’s earnings are sensitive to changes in the global fertiliser prices. These prices have increased by circa 20% and 15% and the company has a positive outlook underpinned by better global agricultural conditions and trade flow redirection.
UBS retains its Buy rating with a target price of $2.40.
Target price is $2.40.Current Price is $2.25. Difference: $0.15 – (brackets indicate current price is over target). If IPL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).