Yara shares have outperformed peers CF Industries and OCI by c10% since mid-January. Nitrogen spreads are likely to come under increasing near term pressure, while the mid-term S/D picture looks less than positive. As a result, we sit c10% below FY21-23 consensus EBITDA. We downgrade the shares to Underperform with a new price target of NOK373 (from NOK395). Reaching a peak Yara shares have risen c14% since mid-January and outperformed its closest nitrogen fertiliser peers by c10%. Arguably this outperformance has been justified with the market having previously taken a sceptical view on how quickly nitrogen prices could keep up pace with rising gas costs. A tight market has resulted in spreads remaining elevated, and as a result, EBITDA estimates have risen c8% since mid-January. With nitrogen pricing starting to show signs of weakness, and gas costs remaining elevated, we believe spreads will start to weaken. This suggests that Q2 could represent a peak in margins, leaving further upgrades unlikely. Q1 miss signals slowing momentum in the upgrade cycle Yara reported a 2% miss on Q1 EBITDA, driven by lower volumes and delayed pricing tailwinds. We adjust our earnings estimates to reflect higher nitrogen pricing during Q1 and lagged increases during Q2. Our FY21 EBITDA estimates remain unchanged. However, we assume a more pronounced compression of nitrogen spreads into H2 and 2022, and cut our FY22/23 EBITDA estimates by c3.5% across both years. How do we differ from consensus? We forecast FY21 EBITDA close to USD2.39bn which is c6% below current consensus. This reflects our view that European nitrogen spreads will normalise during H2 as new capacity ramps and raw material costs remain elevated. For FY22/23 we sit c12% below consensus reflecting our bearish view on demand / supply fundamentals in nitrogen. This also leaves us c150bps below consensus margin expectations next year.