4Q dynamics largely unsurprising Yara reported 4Q20 adj. EBITDA of USD511m, c4.5% ahead of sell-side expectations. Pricing tailwinds were broadly offset by higher gas costs. However, volumes did appear to surprise on the upside, contributing to a USD37m tailwind or c8% y/y. This was driven by higher deliveries in Crop Nutrition (c+8%) which offset declines in Industrial solutions (c-7%). The shares reacted positively on the day. However, we were not surprised to see profit taking afterwards with the shares having hit 5-year highs. Expect pricing to offset gas costs in H1, estimates remain broadly unchanged Spot nitrogen pricing continues to run away and provide an offset to inflationary natural gas prices. As we described in our recent sector note, AGROCHEMICALS: Fertilisers: How to Play the Field, nitrogen fundamentals will likely remain robust during H1 and start to deteriorate as the year progresses. We believe this should allow Yara to just about offset cost inflation during 2021 (we forecast a cUSD580m gas headwind for the full year). Factoring in temporary fixed cost increases of USD100m along with higher H1 pricing, our EBITDA estimates do not move materially, and remain in line with pre results consensus. We anticipate that the shares will also continue to receive support from Yara''s falling leverage (we forecast c1.7x net debt/ EBITDA at ''21 y/e) and continued scope for special shareholder returns. Our price target increases to NOK380 and we remain Neutral rated on the shares. We continue to prefer Nutrien and Mosaic in fertilisers. Green ammonia takes centre stage Despite recent volatility in nitrogen prices, the key focus on Yara remains on its role in decarbonisation. At 4Q results, management announced that it will be creating a new clean ammonia segment for its green and blue ammonia production. That said, a lot of questions remain unanswered, namely the capex and returns profile of future green ammonia investments. The...