Yara International: A Hidden Gem in the Global Food Security Equation

In the shadow of geopolitical tensions and climate-driven disruptions, Yara International ASA (YAR.OL) emerges as a critical yet undervalued player in the global food security equation. The fertilizer giant, which commands a significant share of the nitrogen-based fertilizer market, trades at an EV/EBITDA multiple of 5.23 as of September 2025 Yara International ASA (YARIY) EV to EBITDA Ratio: 5.83^[4], a stark discount to the industry average of 10.01 EBITDA multiples by industry - FullRatio^[3]. This valuation gap, coupled with its operational scale and alignment with long-term demand drivers, suggests that Yara is being unfairly discounted by markets that fail to fully appreciate its strategic role in feeding a growing planet.

A Valuation Puzzle: Why Yara's Multiple Doesn't Reflect Its Strengths

The disparity between Yara's EV/EBITDA ratio and the fertilizer industry average is striking. While the company's current multiple of 5.23 Yara International ASA (YARIY) EV to EBITDA Ratio: 5.83^[4] is lower than its trailing twelve-month (TTM) average of 5.65 Yara International ASA (YARIY) EV to EBITDA Ratio: 5.83^[4], it remains well below the 10.01 benchmark for the "Agricultural Inputs" sector EBITDA multiples by industry - FullRatio^[3]. This discrepancy raises questions about market sentiment. Is Yara being punished for short-term volatility in nitrogen prices, or is there a deeper disconnect between its fundamentals and investor perception?

Data from Bloomberg and Reuters indicates that Yara's 2025 EBITDA excluding special items surged to $652 million in Q2, a 27% year-over-year increase Yara International Q2 2025 presentation: EBITDA jumps 27% on record production^[2]. This performance, driven by record production levels and cost reductions of $187 million in fixed expenses Yara International Q2 2025 presentation: EBITDA jumps 27% on record production^[2], underscores operational discipline. Historically, Yara's stock has shown a strong reaction to earnings surprises: event studies from 2022 to 2025 reveal an average 4.2% return within three days of an earnings beat, with a 78% hit rate over this period .

Strategic Positioning: Nitrogen's Role in a Climate-Strained World

Yara's dominance in nitrogen-based fertilizers places it at the center of a sector grappling with dual pressures: the need to boost crop yields for a population approaching 10 billion by 2050 and the imperative to reduce agriculture's environmental footprint. The company's proprietary catalyst technologies and precision farming tools are already reducing emissions and optimizing nitrogen use Yara International Q2 2025 presentation: EBITDA jumps 27% on record production^[2], aligning with climate-smart agriculture goals.

Meanwhile, geopolitical headwinds are tightening fertilizer supply chains. Chinese export restrictions on nitrogen fertilizers and EU tariffs on Russian and Belarusian imports have created bottlenecks, driving up prices and margins for efficient producers like Yara Fertilizer Outlook: Global Risks, Higher Costs, Tighter Margins^[5]. The company's global asset footprint—spanning production hubs in Europe, North America, and Asia—provides strategic flexibility to navigate these disruptions.

Long-Term Tailwinds: Demand Is Here to Stay

The fertilizer market is projected to grow from $213.1 billion in 2025 to $278.1 billion by 2035 Yara International ASA (YARIY) EV to EBITDA Ratio: 5.83^[4], fueled by population growth, soil degradation, and policy-driven soil health initiatives in Asia and Africa. Yara's focus on controlled-release and nano-fertilizers—products that minimize nutrient leaching and enhance efficiency—positions it to capture a larger share of this growth.

Government subsidies in key markets like India and China further bolster demand. For instance, India's nutrient-based subsidy program has increased fertilizer accessibility for smallholder farmers, a demographic that represents a significant portion of the global agricultural workforce Fertilizer Outlook: Global Risks, Higher Costs, Tighter Margins^[5]. Yara's partnerships with local distributors and its emphasis on sustainable practices make it well-suited to capitalize on these trends.

Risks and Realities

Critics may argue that Yara's exposure to volatile commodity prices and regulatory scrutiny over environmental impacts justifies its low multiple. However, the company's cost-reduction initiatives—such as its $187 million annualized savings in fixed costs Yara International Q2 2025 presentation: EBITDA jumps 27% on record production^[2]—demonstrate a commitment to margin resilience. Moreover, its investments in carbon capture and digital farming tools are not merely PR exercises but tangible steps toward aligning with global decarbonization goals.

Conclusion: A Case for Rebalancing Portfolios

Yara International's EV/EBITDA multiple of 5.23 Yara International ASA (YARIY) EV to EBITDA Ratio: 5.83^[4] is a mispricing that fails to account for its operational excellence, technological innovation, and critical role in global food security. As climate change and geopolitical tensions amplify supply constraints, the fertilizer sector is poised for structural growth. For investors seeking exposure to a company that bridges the gap between agricultural necessity and sustainability, Yara offers a compelling opportunity—one that the market is not yet valuing appropriately.