Deutsche Bank trims Norsk Hydro to ‘hold’ as aluminium rally stretches valuations

Deutsche Bank has downgraded Norsk Hydro to “hold” from "buy", as it raised its price target to NOK100 (USD 9.3) from NOK88 (USD 8.2), citing stretched valuations after a sharp rally in aluminium prices.

Shares of the Norwegian producer closed at NOK107.60 (USD 10), marking a record high. The stock has doubled over the past year and gained nearly 40 per cent in 2026 so far, supported by firm aluminium prices.

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Analyst Liam Fitzpatrick said the bank remains constructive on the company’s long-term outlook. He noted that current valuations reflect aluminium prices beyond sustainable levels.

According to Deutsche Bank, Norsk Hydro’s share price implies aluminium prices in the range of USD 3,200–3,400 per tonne, above incentive levels and marginal production costs, indicating limited near-term upside.

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According to the bank's analysis, uncertainties regarding restoring alumina flows from delays, especially from the Middle East, will increase aluminium's price, which should push Norsk Hydro's EBITDA towards its peak level of NOK11 billion (USD1.0 billion) seen in Q2 of 2022, depending on prolonged geopolitical tension diminishing demand for aluminium.

Deutsche Bank expects partial supply recovery by the end of 2026, with broader normalisation likely in the second half of 2027. Copper forecasts were raised to around USD 12,800 per tonne, while iron ore estimates were kept steady at USD 101 per tonne.

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