Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Given the benefit of the doubt

Bakkafrost (Hold, TP: NOK660.00) - Big miss in Q3, but good biomass

Bakkafrost reported operating EBIT of DKK173m, c31–40% below our estimates and consensus on higher costs in both farming regions. The good quality of standing biomass gives reason to be optimistic on size and price premium into the winter. Thus, we have increased our EPS for 2025e by 9.6%, but cut our 2026e by 2.3% on slower margin recovery in Scotland. We reiterate our HOLD and NOK660 target price.

Q3: EBIT 36% below, but '25 guidance in line

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Choppy waters, but the tide is rising

Another strong H1 on the cards

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Lower prices and costs

We remain positive on the sector, as we still find the valuation supportive at 2025–2026e P/E’s of 13-11x, with SalMar and Mowi as our top picks. For our 2025–2026 sector forecasts, we have increased global supply by 30–40kt on 3–4% growth, noting high regulatory risk in some regions, but have reduced our spot prices by EUR0.2/kg to EUR7.7–7.9/kg. We have also reduced production costs by NOK1.5–3.5/kg on prevailing feed input prices, and cut our 2025e EPS by 7% but raised 2026e by 6%.

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Bakkafrost (Hold, TP: NOK620.00) - Higher tax proposed in Faroes

A proposal for an additional 8% tax on applicable income from smolt, seawater farming, farming service vessels and harvesting has been sent for public consultation in the Faroe Islands. We believe it is likely to be implemented, and have lowered our 2025–2026e EPS by 3.1–2.9%. Following a strong share price performance and our estimate cuts, we have lowered our target price to NOK620 (640), and downgraded to HOLD (BUY). We are 2% below consensus on Q3e operating EBIT (results due at 06:00 CET on...

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Q3 trading update: Volumes 18% above

Downside risk in Q3 should be well known

Estimate risk, but entering BAKKA season

We expect EBIT of DKK 209m, -18% vs. consensus. Key risk is price achievement on Faroes and FOF margin. Estimate risk is high, but entering BAKKA season: HOLD.

Canada: Key questions still unanswered in BC aquaculture transition pl...

Introduction to the salmon sector

This report provides an overview of the dynamics, companies, history, challenges and opportunities of the salmon farming industry. Biological challenges and stricter regulations over the past decade have curbed the supply of salmon, a globally consumed product with a strong ESG angle. Significant infrastructure investments made by the companies to solve these challenges have not yet yielded materially higher supply, leading to continued high salmon prices. Despite higher EBIT margins the sector ...

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Lower tax proposed

The largest opposition party (Høyre) has launched a new draft proposal for its next parliamentary election programme. One of the suggestions is a lower and less bureaucratic resource tax. In the event of a 15% resource tax (down from 25%), we calculate the following preliminary 2025–2026e EPS impacts on the companies we cover: Grieg Seafood (15%), SalMar (12%), Lerøy Seafood (9%), Måsøval (8%), Mowi (7%), and Bakkafrost (0%). While this is only a proposal, we believe it will likely materially li...