Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

If it's too good to be true, it usually is

Salmon prices higher on another blow to '24e supply, but farmers struggling to reap the benefits due to weak biology. Valuation not demanding, but more mixed triggers short term.

Close to the inflection point

Q1'24e EBIT of NOK 232m (FactSet cons. NOK 293m). Inflection point biology-wise in H2 supports '25e-26e growth. BUY on '25e P/E of 9x and pot. upside from strategic review.

Vermilion Compass: Weekly Equity Strategy

Are the Lows "In" for this Pullback? While we are not yet out of the woods, we continue to see evidence that suggests the lows may be "in" for this pullback. Last week (4/23/24 Compass) we discussed the possibility that further downside was limited on the S&P 500 due to a multitude of reasons (SPX had simply filled 2/22/24 gap support that we had been discussing since late-February, Russell 2000 and Equal-Weighted S&P 500 were holding above key supports, short-term oversold conditions, subdued ...

Telenor (Buy, TP: NOK145, +14%) Q1 24: Good numbers, impressive FCF g...

Telenor has reported a good set of Q1 numbers, with SR and EBITDA c1% ahead, and FCF 49% ahead. FY24 guidance has not been lifted (but has been reiterated) despite the good Q1 numbers, with phasing of payments/items to impact FCF throughout the rest of the year, and this is perhaps a little disappointing, but momentum is clearly with Telenor at present, and if current trends persist, then guidance and estimates will move up.

EBITDA-capex 3% above, strong FCF

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Norsk Hydro (Sell, TP: NOK50.00) - Q1 slightly on the soft side

Q1 EBITDA was c2% below consensus, with a somewhat soft mix, as Extrusions and Aluminium Metal, the two largest segments, were below forecasts. We have increased our 2024e EPS by 7% on the USD2,600/t spot aluminium price, and 2025–2026e by 2% on the Q1 results. We are 30% below consensus 2025e EBITDA; we do not see enough demand to raise aluminium prices above the marginal producer’s cost, as the price appreciation in recent weeks suggests. We still expect aluminium prices to decline with lower ...

Demand growing faster than supply - BUY

Q1'24 EBITDA of NOK 5.4bn, '24e-'26e EBIT up 2-3% post report. Market tightening rapidly in Q1 - demand up 5%, supply up 3%. Reiterate BUY — TP NOK 75.

EBITDA 2% below on higher cost

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Sector title

Sector title

Wallenius Wilhelmsen ASA Minor model adjustments

We have marginally lowered our 2024-2026 estimates (results due at 07:00 CET on 8 May), on the more impactful Red Sea disruptions and the company’s estimated USD5m–10m negative EBITDA effect from the Baltimore bridge collapse. We believe WAWI could further renew its contract portfolio at significantly higher levels and build earnings momentum for the years ahead. So far in 2024, the company has announced USD2.8bn of committed contracts (nearly USD1bn in annual revenues, or 19% of 2023, for the n...

Grieg Seafood (Buy, TP: NOK80.00) - Approaching end of spiro harvest

Grieg Seafood’s Finnmark operations have been plagued by reduced prices and high costs due to the spiro parasite in recent quarters. It guides for the last spiro fish to be harvested in Q2. We estimate Q1 operating EBIT of NOK337m (consensus NOK334m). We have cut our 2024e EPS by 17.7%, due to lower expected realised prices from the Canadian operations, as US spot prices in Q1 were below our estimates. We reiterate our BUY and NOK80 target price, as the valuation is more closely linked to capaci...

Norsk Hydro (Sell, TP: NOK50.00) - 30% below 2025e EPS consensus

We expect aluminium prices to come down with falling global energy prices, and reiterate our SELL and NOK50 target price. We are 30% below consensus on 2025e EBITDA; we do not see large enough demand to raise aluminium prices above the marginal producer’s cost, as suggested by the price appreciation in recent weeks, we believe. We expect Q1 EBITDA of NOK6.2bn (results due at 7:00 CET on 24 April), driven by high hydropower production volumes in the quarter. We have reduced our 2025–2026e EPS by ...