SalMar (Buy, TP: NOK550.00) - Potential share overhang removal
Q2 operational EBIT was in line with consensus expectations and the cost guidance was slightly better than expected. Following the refinancing and sale of Frøy, the board will propose to cancel 13.1m treasury shares, removing the share overhang weighing on the stock since the acquisition. A one-off resource tax implementation charge has substantially reduced our 2023e EPS, while the proposed cancellation of treasury shares has positively affected our 2024–2025e. We reiterate our BUY and have raised our target price to NOK550 (520).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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