SalMar (Hold, TP: NOK743.00) - Valuation getting tougher
Following the Q1 trading update, we expect operational EBIT of NOK1,304m, c22% above consensus. We are above consensus on 2022e EPS but in line on 2023–2024e, leaving less upside potential to consensus revisions. We see a potential value uplift from the inclusion of NTS and a higher spot price but believe the current share price partly reflects this. We have raised our target price to NOK743 (725) to account for the assumed 50.2% ownership (irrevocably pre-accepted) in NTS, but downgraded to HOLD (BUY) after a strong share price performance.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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