Lerøy Seafood (Buy, TP: NOK61.00) - Paper cuts to estimates
Q1 operating EBIT was NOK989m, 8% below our expectation and 9% below consensus. Although the 2023–2025 harvest guidance was unchanged, the takeout of fish at low weights in Q1 did not inspire confidence in biology. The 2023 harvest guidance was also dependent on the company handling H2 better than last year. We have cut our 2023–2025e EPS by 7.0–2.7%, spread across all divisions, taking us in line with consensus. We reiterate our BUY but have lowered our target price to NOK61 (67).Leroy Seafood Group is a supplier of seafood. Co.'s primary products are Atlantic salmon and trout. Co. reports within two main segments: Production and Sales and Distribution. The Production segment includes Co.'s activities within production and processing, mainly Atlantic salmon and trout. The subsidiaries in this segment are a main employer along the Norwegian coastline and other areas. The Sales and Distribution segment has a global reach, comprising sales, marketing, product development and distribution of both Co.'s own produced products as well as for external suppliers. Co. is also engaged in nationwide distribution of fresh fish on the Norwegian market.
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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