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Norsk Hydro (NHYDY)
OTHER OTC:NHYDY
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Norsk Hydro
(OTC:NHYDY)
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Rating:67Neutral
Price Target:
$10.00
▲(43.47% Upside)
Action:DowngradedDate:02/18/26
The score is driven primarily by stable financial footing and strong cash-generation capacity despite cyclical earnings volatility, plus a favorable technical uptrend. These positives are tempered by a relatively high P/E with only a modest yield and a mixed earnings-call outlook that highlights near-term segment pressure and seasonal/cost headwinds despite ongoing cost-reduction initiatives.
Positive Factors
Cash generation
Hydro’s ability to generate strong operating cash flow (NOK 23.3B) and a materially improved free cash flow (NOK 11.7B in 2025) provides durable internal funding for capex, dividends and debt reduction. This cash capacity cushions commodity cycles and supports multi-year strategic projects.
Balance sheet strength
A substantial equity base and moderate leverage (debt-to-equity ~0.37) give Hydro flexibility to withstand aluminum cycle swings, absorb impairments or restructuring costs, and maintain investment capacity. Healthy capitalization supports long-term commitments and preserves strategic optionality.
Energy position & long-term contracts
Rising power production, secured long-term PPAs (5.25 TWh) and the Illvatn pumped-storage investment strengthen Hydro’s low-cost, renewable energy base. That structural energy advantage lowers input cost volatility for smelters and supports a greener, competitive aluminum production profile over coming years.
Negative Factors
Cyclical revenue & profit volatility
Hydro’s top-line and margin history show pronounced commodity-driven swings. Large year-to-year revenue and margin variability complicates multi-year forecasting, capital allocation and consistent return generation, meaning corporate targets and payouts depend heavily on favorable market cycles.
Earnings quality & adjusting items
Significant unrealized derivative losses and restructuring/closure costs create large gaps between adjusted and reported results. Persistent sizable one-offs and mark-to-market exposures reduce transparency, amplify reported volatility, and make it harder to assess sustainable operating performance.
Segment-specific pressures
Sharp deterioration in Bauxite & Alumina and weakness in Extrusions/Metal Markets reflect structural demand/pricing stress (alumina surplus, softer premiums) and operational correction needs. Sustained segmental underperformance can erode consolidated margins and require continued restructuring or asset adjustments.
Norsk Hydro (NHYDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.49B
Dividend Yield2.82%
Average Volume (3M)31.09K
Price to Earnings (P/E)28.2
Beta (1Y)0.75
Revenue Growth13.03%
EPS Growth699.85%
CountryUS
Employees32,614
SectorBasic Materials
Sector Strength58
IndustryAluminum
Share Statistics
EPS (TTM)0.07
Shares Outstanding1,978,489,100
10 Day Avg. Volume45,049
30 Day Avg. Volume31,094
Financial Highlights & Ratios
PEG Ratio1.31
Price to Book (P/B)1.55
Price to Sales (P/S)0.74
P/FCF Ratio13.17
Enterprise Value/Market Cap10.64
Enterprise Value/Revenue0.95
Enterprise Value/Gross Profit3.05
Enterprise Value/Ebitda7.14
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)0.71
Revenue Forecast (FY)$21.61B
Norsk Hydro Business Overview & Revenue Model
Company DescriptionNorsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, remelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Bauxite & Alumina, Aluminium Metal, Metal Markets, Extrusions, and Energy segments. The Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company's primary metal plants; operates recyclers; and trades in physical and financial metals. The Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery, and hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.
How the Company Makes MoneyNorsk Hydro generates revenue primarily through the production and sale of aluminum products, which includes bauxite, alumina, and various aluminum extrusions and rolled products. The company's revenue model relies on the global demand for aluminum, with significant sales to sectors that require lightweight and durable materials. Key revenue streams include the sale of primary aluminum, which is heavily influenced by market prices and demand from industries such as automotive and construction. Additionally, Norsk Hydro benefits from long-term contracts with major customers, which provide stability in revenue generation. The company also engages in trading activities to optimize its supply chain and capitalize on market opportunities. Partnerships with other industry players and investments in renewable energy further enhance its operational efficiency and profitability.
Norsk Hydro Earnings Call Summary
Earnings Call Date:Feb 13, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: operational strengths and solid cash generation (adjusted EBITDA, free cash flow, RoaCE above target, upstream production above nameplate, strong energy production and strategic power contracts) and clear strategic progress (Illvatn investment, hedging, cost reductions, dividend proposal). These positives are, however, tempered by significant near-term headwinds—lower revenues (-14% YoY), large adjusting items that produced a reported loss, sharp YoY deterioration in Bauxite & Alumina EBITDA, continued weakness in Extrusions and Metal Markets, and notable FX/derivative losses. The company delivered resilient adjusted performance and improved full-year EBITDA, but the pronounced segment-level pressures and accounting adjustments create a balanced risk/return outlook in the near term.Q4-2025 Updates
Positive Updates
Strong Adjusted EBITDA and Cash Generation
Adjusted EBITDA of ~NOK 5.6 billion in Q4 and full-year adjusted EBITDA up NOK 2.6 billion (from NOK 26.3bn to NOK 28.9bn, +9.9% year-over-year). Free cash flow of NOK 4.6 billion in Q4 and net debt decreased by NOK 3.9 billion since Q3.
Return on Capital and Dividend Proposal
Adjusted RoaCE for the year of 10.2%, above the 10% target. Board proposed ordinary dividend of NOK 3 per share (NOK 5.9 billion), representing 60% of adjusted net income and a year-end yield of ~3.8%.
Upstream Operational Outperformance
Alumina production above nameplate capacity in Q4; primary aluminum (smelter) production up ~2.5% year-over-year in Q4. Bauxite & Alumina delivered its second-best EBITDA ever for 2025.
Energy Production and Long-Term Power Contracts
Power production increased ~13.6% year-over-year in Energy. Signed two long-term power purchase agreements covering 5.25 TWh (period 2031–2040) in price area NO3, and final investment decision on Illvatn pumped storage (gross NOK 2.5 billion, net ~NOK 1.2 billion).
Cost Savings and Restructuring Progress
Strategic workforce reduction completed with ~850 white-collar FTEs leaving or to leave, expected annual savings of ~NOK 1 billion from 2026. Confirmed closure of two Extrusion plants (Bedwas, Cheltenham) with ongoing processes for three more.
Hedging and Bookings for Q1 2026
Aluminum Metal has booked ~70% of primary production for Q1 at USD 2,803/t and 40% of premiums at USD 478/t; expected realized premium range USD 380–430/t, providing price coverage for Q1.
Upstream Volume and Trading Contributions
Upstream volumes and commercial alumina trading contributed positively to Q4 results (B&A commercial/trading contribution ~NOK 300 million in Q4). Lower raw material costs also supported results.
Full-Year Positive Drivers
Full-year drivers included higher aluminum prices, upstream volume growth, raw material cost improvements (net +NOK 500m), and higher energy prices/production (+NOK 800m).
Negative Updates
Revenue and Reported Losses
Revenues fell ~14% year-over-year to ~NOK 47 billion in Q4. Reported EBITDA almost NOK 2 billion vs adjusted EBITDA NOK 5.6 billion due to ~NOK 3.6 billion of adjusting items, producing reported net loss of NOK 2.2 billion in Q4 (adjusted net income NOK 1.7 billion).
Large Adjusting Items and Impacts on Reported Results
Major adjusting items included an unrealized derivative loss (mainly LME) of NOK 2.3 billion and rationalization/closure costs of NOK 1.3 billion; impairments and FX effects further widened the gap between adjusted and reported EBIT (difference ~NOK 4.3 billion).
Bauxite & Alumina Q4 YoY Earnings Drop
Bauxite & Alumina adjusted EBITDA decreased from NOK 5.0 billion in Q4 2024 to NOK 1.4 billion in Q4 2025 (~-72%), driven by lower alumina prices and negative currency effects despite higher sales volumes and strong trading.
Alumina Price Pressure and Market Surplus
PAX (alumina index) declined from $321/t in Q3 to $306/t at quarter-end. CRU estimates a small global alumina surplus ~700,000 tonnes in 2025 (expected to narrow to ~500,000 tonnes in 2026), pressuring prices and margins.
Weakness in Metal Markets and Trading/Inventory Effects
Metal Markets adjusted EBITDA swung from NOK 319 million in Q4 2024 to negative NOK 56 million in Q4 2025, driven by lower sourcing/trading results and adverse currency and inventory valuation effects; recycling results also softened.
Extrusions Under Pressure
Extrusions adjusted EBITDA fell from NOK 371 million in Q4 2024 to negative NOK 62 million in Q4 2025. Full-year Extrusions faced reduced volumes/margins (sales volumes -1% in 2025), transport shipments down 4%, and closures/provisions related to restructuring (increased provisions ~NOK 700m).
Currency, FX Losses and Higher Fixed Costs
Notable FX losses including NOK 575 million in Q4 driven by weaker BRL vs USD. Fixed costs increased (seasonal and inflation effects) with an FY increase impact of NOK 800 million; currency effects reduced adjusted EBITDA by NOK 2.7 billion year-over-year.
Short-Term Operational Seasonality and Q1 Headwinds
Guidance signals seasonally lower production in Q1 (fewer operating days and planned maintenance), anticipated higher raw material and fixed costs in Aluminum Metal for Q1 (+NOK 100–200m raw materials; +NOK 50–150m fixed costs), and lower expected price area gains in Energy.
Company Guidance
Guidance for Q1 2026: Bauxite & Alumina — fixed and raw material costs expected to remain stable while production volumes decline seasonally (fewer operating days and planned maintenance) and trading normalizes; Aluminum Metal — 70% of primary production booked at USD 2,803/tonne, 40% of premiums booked at USD 478/tonne with realized premium expected at USD 380–430/tonne, raw material expenses forecast to rise NOK 100–200 million, fixed costs NOK 50–150 million and sales volumes expected to increase; Metal Markets — stable recycling results and commercial adjusted EBITDA for 2026 (ex. currency/inventory valuation) guided to NOK 200–400 million; Extrusions — external Q1 volumes +1% Europe / −1% North America, Hydro expects Europe largely stable and North America slightly down, margins broadly flat and metal effect broadly flat vs Q1 ’25 (full‑year 2025 metal effect ~NOK 700 million); Energy — Q1 production expected to fall below normal seasonal levels due to maintenance, prices seasonally higher but price‑area gains to decline; and corporately the strategic workforce reduction (~850 white‑collar roles) should deliver roughly NOK 1 billion of annual savings from 2026, Illvatn investment is gross NOK 2.5 billion (net ~NOK 1.2 billion), and the Board has proposed a NOK 3/share dividend (NOK 5.9 billion, 60% of adjusted net income) while maintaining an adjusted net debt target of ~NOK 25 billion (Q4 adj. net debt NOK 18.2 billion).Norsk Hydro Financial Statement Overview
Summary
Cash flow is a relative strength (operating cash flow robust and free cash flow rebounded in 2025), and the balance sheet looks healthy with a large equity base and moderate leverage. Offsetting this, revenue and profitability have been volatile and materially below the 2022 peak, indicating cyclical and less consistent earnings power.Income Statement
Revenue has been volatile, with growth swinging from strong expansion in 2022 to declines in 2023 and 2025 (annual revenue growth: 2022 +38.9%, 2023 -6.9%, 2024 +5.2%, 2025 -3.6%). Profitability also shows a clear downshift from the 2022 peak: net margin fell from 11.6% (2022) to 1.9%–3.2% (2023–2025), and operating profitability is meaningfully lower than 2021–2022 levels. Positives include still-solid gross margins (~31%–38% across the period) and a recovery in net income from 2023 to 2025, but overall earnings power appears cyclical and less consistent than in prior years.61
Positive
Balance Sheet
The balance sheet is generally supported by a large equity base (equity ~NOK 99.8B in 2025 vs. assets ~NOK 208.3B), which helps absorb commodity-cycle volatility. Leverage looks moderate in 2025 (debt-to-equity ~0.37) and similar to 2020–2022 levels (~0.32–0.40), though the extremely low debt shown in 2023–2024 appears inconsistent versus adjacent years and adds some uncertainty when interpreting the trend. Overall, capitalization looks healthy, but leverage can step up depending on the cycle.70
Positive
Cash Flow
Cash generation is a relative strength: operating cash flow remained robust (NOK 23.3B in 2025; NOK 22.2B in 2023) and free cash flow improved sharply in 2025 (NOK 11.7B, +17.0% vs. prior year). However, free cash flow has been uneven (notably weak in 2024 at NOK 1.8B) and cash conversion vs. accounting earnings is only moderate based on the provided ratios (free cash flow to net income ~0.50 in 2025; ~0.12 in 2024). Still, the company demonstrates an ability to produce meaningful free cash flow in better years.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 207.97B | 203.63B | 193.62B | 207.93B | 149.65B |
| Gross Profit | 64.53B | 74.29B | 70.08B | 78.56B | 52.97B |
| EBITDA | 27.55B | 22.19B | 18.27B | 42.33B | 27.50B |
| Net Income | 6.72B | 5.79B | 3.58B | 24.15B | 12.16B |
Balance Sheet | |||||
| Total Assets | 208.30B | 207.37B | 206.46B | 198.62B | 174.51B |
| Cash, Cash Equivalents and Short-Term Investments | 27.75B | 16.77B | 26.48B | 31.70B | 26.57B |
| Total Debt | 36.57B | 11.00M | 954.00M | 32.77B | 28.42B |
| Total Liabilities | 101.20B | 99.92B | 99.28B | 90.82B | 86.13B |
| Stockholders Equity | 99.84B | 101.46B | 100.58B | 102.45B | 84.06B |
Cash Flow | |||||
| Free Cash Flow | 11.73B | 1.80B | 8.58B | 19.79B | 4.66B |
| Operating Cash Flow | 23.31B | 15.36B | 22.22B | 29.39B | 10.68B |
| Investing Cash Flow | -17.91B | -12.92B | -20.76B | -10.56B | -4.68B |
| Financing Cash Flow | -3.72B | -12.56B | -6.70B | -13.25B | -4.37B |
Norsk Hydro Technical Analysis
Positive
6.97
Price Trends
8.58
Positive
7.81
Positive
6.96
Positive
Market Momentum
0.18
Positive
59.31
Neutral
82.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NHYDY, the sentiment is Positive. The current price of 6.97 is below the 20-day moving average (MA) of 9.13, below the 50-day MA of 8.58, and above the 200-day MA of 6.96, indicating a bullish trend. The MACD of 0.18 indicates Positive momentum. The RSI at 59.31 is Neutral, neither overbought nor oversold. The STOCH value of 82.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NHYDY.
Norsk Hydro Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $16.91B | 14.00 | 20.75% | 0.75% | 20.08% | ― | |
67 Neutral | $18.49B | 28.22 | 6.57% | 2.82% | 13.03% | 699.85% | |
66 Neutral | $3.52B | 13.47 | 32.93% | ― | 8.48% | 12.10% | |
65 Neutral | $4.79B | 129.85 | 5.50% | ― | 20.15% | -72.89% | |
65 Neutral | $2.19B | 19.23 | 15.06% | 2.64% | 7.69% | 91.86% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
54 Neutral | $11.32B | -123.01 | -4.98% | ― | 26.44% | -95.87% |
* Basic Materials Sector Average
NHYDY
Norsk Hydro
8.99
3.46
62.43%
AA
Alcoa
63.84
32.98
106.87%
CENX
Century Aluminum
52.92
34.66
189.81%
KALU
Kaiser Aluminum
132.58
66.25
99.88%
CSTM
Constellium
25.83
15.66
153.98%
MP
MP Materials
61.40
38.95
173.50%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.