Bakkafrost (Sell, TP: NOK430.00) - Set for solid Q2, but stock looks rich
We forecast Q2 operational EBIT of DKK368m, ~7% above consensus of DKK346m (results due at 06:00 CET on 21 August). We expect losses in the VAP unit given low utilisation in the processing factory and rising spot prices, but believe Farming will more than make up for this. Overall, we have raised our 2018e EPS by 3.8%. We maintain our NOK430 target price; however, following the strong share price performance, we now see 17% potential downside. Hence we have downgraded Bakkafrost to SELL (HOLD).
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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