Grieg Seafood (Buy, TP: NOK90.00) - Q2e consensus too high, but share-price upside potential now solid
We expect Q2 operating EBIT of NOK391m, c32% below consensus of NOK577m, driven by lower earnings from BC, and soft performance in Q2 as consensus likely comes down. The share price has dropped 19% since our downgrade; thus, BC regulatory risk now seems well reflected. We have lowered our target price to NOK90 (94) due to earnings cuts, but have upgraded to BUY (HOLD) given the 25% upside potential to reach our new 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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