Kepler Cheuvreux is raising its recommendation for Norwegian fertilizer manufacturer Yara to "buy" from "hold" and raising its target price significantly to NOK 410 from NOK 324.

In an analysis, Kepler writes that Yara is a strong cash flow generator, with a free cash flow of 12 percent forecast for 2027, and that the share is considered to have continued upside potential.

"Based on our conviction that the difference between nitrogen prices and gas prices will continue to develop in Yara's favor, we are raising our forecasts significantly across the entire forecast horizon. We were already above market EBITDA estimates for all three forecast years, but are now 21 percent above the current consensus for 2025 and 34 percent above for 2027," the report states.

The share is trading up 2.5 percent at NOK 376.70.