SalMar (Buy, TP: NOK520.00) - Expecting strong relative results
SalMar’s Q3 trading update revealed harvest volumes of 37.1kt, in line with our estimate. Both we and consensus expect SalMar to have managed well through what was a tough quarter for most peers, reflected in operating EBIT estimates of NOK470m and NOK476m, respectively. We have raised our 2020e EPS by 0.3%, but cut 2021–2022e by 1.6–2.4% on a slower ramp up of volumes in Iceland than previously expected. We reiterate our BUY and NOK520 target price. The full Q3 results are due at 06:30 CET on 12 November.SalMar is a producer of Atlantic salmon and is integrated from roe and smolt to products and sales. Co. has farming operations in Central and Northern Norway, as well as in Scotland. Co. has operating licences for marinephase fish farms and hatcheries in central Norway and Troms County. Co. has 66 licences for production of farmed Atlantic salmon in Norway: 53 in central Norway (More & Romsdal, South and North Trondelag) and 13 in northern Norway (Troms)
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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