SalMar (Hold, TP: NOK270.00) - Near-perfect quarter
SalMar reported operating EBIT of NOK801m, ~19% and 18% above our and consensus expectations. Besides some biological challenges in the UK and Iceland, there were very few weak spots in the report. We have raised our 2017e EPS by 6.5% to account for better volumes and costs, while our 2018e EPS is cut by 0.8% to reflect lower volumes from the UK. We have increased our target price to NOK270 (260) but downgraded our recommendation to HOLD (BUY) as the share price already reflects the improved consensus.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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