Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Cambi (Buy, TP: NOK19.00) - Optimistic on order outlook

Q3 EBITDA of NOK68m was NOK7m above our estimate on higher conversion of backlog. We believe the company looks well positioned for new orders on the strong market growth, most notably in the UK, with a new five-year water infrastructure investment cycle due to commence in 2025, where the budget is up 73% from the previous cycle. We reiterate our BUY and NOK19 target price, and find the stock attractively valued on 2024–2026e EV/EBITDAs of 9.3–8.5x.

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

Cambi Minor model adjustments

We have updated our estimates ahead of Cambi’s Q3 report (due on 7 November). We forecast EBITDA of NOK61m, reflecting slightly lower backlog execution than in Q2. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our NOK19 target price. We view the valuation as attractive, at a 2025–2026e EV/EBITDA of 9.6–9.3x, well below waste management and recycling peers at ~13–11x.

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Choppy waters, but the tide is rising

Another strong H1 on the cards

Western Bulk Chartering (Buy, TP: NOK25.00) - Encouraging signs needed

Q3 marked the company’s seventh consecutive quarter with no dividends, and reflected soft recent performance given its policy of paying out 80% of net profits. However, our reduced normalised TC margin implies a 2025 dividend yield of ~16%, with upside potential to margins converging towards 2020–2022 levels. Also, the share price has fallen ~20% since the Q3 update, removing much of the downside risk, in our view. We reiterate our BUY, but have cut our target price to NOK25 (32).

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Boliden (Buy, TP: SEK480.00) - Earnings growth is on

Due to favourable operations and unusually high gold production, underlying Q3 earnings were above our expectations. Mainly due to the Q3 earnings beat, we have increased our underlying EBITDA by c6%, while we maintain our 2025–2026e EBITDA which is considerably above consensus. We continue to like the favourable exposure to copper and gold and the earnings growth from self-help. We reiterate our BUY, and have raised our target price to SEK480 (470).

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

Boliden (Buy, TP: SEK470.00) - The (long-term) trend is your friend

We have increased our 2024–2025e EBITDA by c2–7% on higher metal price assumptions, and despite the recent strong share-price performance, find the low valuation multiples highly appealing. We expect a material rise in Q3 earnings due to more favourable metal prices and better mining operations than in preceding quarters. In addition to the favourable position in copper and gold mining, we remain intrigued by company-specific earnings drivers for 2024–2027. We reiterate our BUY and have raised o...

Q3 trading update: Volumes 18% above

Downside risk in Q3 should be well known