Lerøy Seafood (Buy, TP: NOK90.00) - All eyes on the CMD
Lerøy Seafood reported Q2 operating EBIT of NOK923m, c13–11% below our forecast and consensus, driven by a miss in sales and distribution as well as in Aurora. The underlying operations are guided to be moving in the right direction, but the market needs more information on the progress. We hope this will be revealed at the planned CMD on 22–23 September. We have made material cuts to our 2022–2024e EPS to reflect lower harvest volumes and a reduced downstream margin. We have cut our target price to NOK90 (100) but 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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