Lerøy (Buy, TP: NOK55.00) - Soft Q4 guidance
Lerøy Seafood reported operating EBIT in line with consensus but above our estimates. Soft guidance for prices in Q4 2017 suggests consensus operating EBIT will need to fall ~7% for 2017. Our estimates were below consensus and we have only made minor adjustments to our 2017–2019e EPS. We maintain a NOK55 target price, but the recent share price correction means we have upgraded our recommendation to BUY (HOLD) as we believe there is now more valuation support.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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