Austevoll Seafood (Buy, TP: NOK115.00) - Stub appears grossly undervalued
Austevoll Seafood reported stronger operating results in Q4 than our forecast and consensus, driven by Lerøy Seafood’s good performance. The stub continues to be valued at negative NOK1.7bn, which we find unjustified given 2020 pro-rata EBITDA of NOK894m and NIBD of NOK2.8bn. The board proposed a DPS of NOK3.5 for 2020, above our NOK3 estimate. We have made minor adjustments to our 2021–2023e EPS. We reiterate our BUY, and have lifted our target price to NOK115 (105) to reflect our higher target price for Lerøy Seafood (NOK80).Austevoll Seafood is a pelagic fishery and seafood company with operations in Norway, Chile, Peru, Ireland and the U.K. Co.'s operations include fishing vessels, fishmeal plants, canning plants, freezing plants, and salmon farming. Co. has four segments: salmon and trout, which consist of the production to sales and distribution of Atlantic salmon and trout; fishmeal and oil, which consist of the production and sales of the products; pelagic North Atlantic, which consist of the production, sales and distribution of fishmeal, fish oil and frozen pelagic fish products; and human consumption, which consist of the production, sales and distribution of fresh, frozen and canned fish products.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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