Lerøy Seafood (Hold, TP: NOK70.00) - Full-year guidance at risk
According to the Q3 trading update, harvest volumes were down 19% YOY, which suggests 26% YOY growth is needed in Q4 for the company to reach its full-year guidance. We have trimmed our full-year volume estimate on the back of this, although this has been offset by marginally higher Q3 spot prices. We expect Q3 operational EBIT of NOK705m, 14% below consensus of NOK823m. We reiterate our HOLD, but have increased our target price to NOK70 (65) due to higher terminal margin assumptions. The Q3 results are due at 06:30 CET on 8 November.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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