Dyno Nobel's (ASX:DNL) sale of the Phosphate Hill business was a relatively clean exit from the sector, reducing future risks, with the core Explosives trading well, according to a Monday note by Jefferies.

The firm agreed to sell its Phosphate Hill fertilizer business to Mayfair Australia subsidiary Ryowa II GPS for a nominal consideration of AU$1. The net negative fiscal 2026 earnings before interest and taxes impact from Phosphate Hill changes was AU$190 million.

The downgrade risk to the fiscal year 2026 explosives guide was alleviated after the firm reiterated explosives guidance despite currency headwinds.

The investment firm retained its buy rating and cut the price target to AU$3.90 per share from AU$4 per share.