Grieg Seafood (Buy, TP: NOK135.00) - Increased confidence in 2020 goals
With the Q3 results known following the profit warning on 24 October, focus was on the guidance. Grieg Seafood guides for 26m smolt release in 2018 and 26m–28m in 2019, which should mean a >100kt harvest in 2020 under normal assumptions. Management confirmed it is on track to realise this growth and aims for a steady-state >100kt harvest post-2020. We have cut our 2019e EPS by 11.3%, due to the lower than expect harvest guidance, but have increased confidence in 2020 targets being reached. We reiterate our BUY and NOK135 target price.Greig Seafood is a fish farming group, based in Norway, that specialized in salmon and trout. Co. is the parent company of the Greig Seafood Group. Co. is engaged in the production and sale of seafood, and naturally related activities to the sale of seafood. Co. is predominately engaged in the production of farmed salmon and trout, with a production capacity of around 95,00 tons gutted weight annually. Co. has 100 licences for salmon production and five licences for smolt production. Co. has operations in Finnmark and Rogaland in Norway, British Columbia in Canada, and Shetland (the U.K.).
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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