Lerøy Seafood (Buy, TP: NOK90.00) - A solid quarter
Q4 operating EBIT of NOK902m was 1% above our expectation, reflecting better achieved prices in Aurora and Midt as well as good cost control. The NOK2.5 DPS proposed for 2021 was in line with our estimate but above consensus. The 2022 harvest guidance was a little soft, but the indicated timeline for cost increases from higher feed prices was slower than we expected. We have cut our 2022e EPS by 4.6%, but solid operations and attractive valuation versus peers mean we have raised our target price to NOK90 (85), and we reiterate our BUY.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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