JPMorgan Downgrades Norsk Hydro Amid Brazil Gas Supply Concerns
Norsk Hydro SA's stock rating was downgraded by JPMorgan from Overweight to Neutral due to ongoing disruptions in natural gas supply at its Alunorte alumina refinery in Brazil. The firm cited temporary curtailment and management purchasing natural gas volumes at spot prices as the reasons for the downgrade.
JPMorgan revised Norsk Hydro's third-quarter and fourth-quarter 2026 EBITDA forecasts by 13% and 24%, respectively, placing them below Bloomberg consensus estimates. The analyst also put the stock on Negative Catalyst Watch ahead of its upcoming earnings release on October 23, warning that potential upside to cost guidance could trigger consensus earnings downgrades.
The firm's analysis suggests Norsk Hydro trades at undervalued multiples compared to European base metal peers, with spot EV/EBITDA multiples of 6.1 times and 5.5 times for 2026 and 2027, respectively. The company's current EV/EBITDA stands at 3.48 times based on the last twelve months.