Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Boliden (Buy, TP: SEK500.00) -

Battered for a number of quarters by operating issues, lower metal grades at key mines and falling metal prices, we believe Boliden’s earnings headwind is now a tailwind. Moreover, on top of support from higher metal prices, we see distinct company-specific earnings drivers for 2024–2027e: 1) Odda completion; 2) Tara restart; 3) restored Rönnskär operations; and 4) normalised copper grades at Aitik. Our 2027e record earnings translate into a low P/E of c7x, and we see ample room for cash distrib...

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Cambi (Buy, TP: NOK20.00) - Preparing for higher activity

We consider the project delays in Q1 a bump in the road, and expect the business case to remain strong on increasing awareness and commercial interest for thermal hydrolysis, and an expanding pipeline of potential projects, supported by a backlog with 40% in the engineering phase set to enter manufacturing this year. We reiterate our BUY and NOK20 target price, and find the stock attractive at 2024–2025e EV/EBITDAs of 8.5–7.9x, versus its waste management and recycling peer group at ~12x.

Bakkafrost (Hold, TP: NOK600.00) - High expectations

Operating EBIT was a solid DKK710m, c5–7% above consensus and our estimate, driven by a high EBIT margin in Faroes Farming and in the fish feed, oil and meal operations. We believe market expectations were high, and the guidance for a more back-end loaded Faroes harvest failed to excite. We have increased our 2024–2025e by 0-5.3% driven by higher Faroes Farming margins. We reiterate our HOLD, but have raised our target price to NOK600 (590).

The higher they fly, the harder they fall

'24e-25e EBIT -5-4% on Scotland and lower volumes. Great Q1, but clouds on the horizon and headwinds ahead. Given the continued risk of disappointments, we keep SELL.

Bakkafrost (Hold, TP: NOK590.00) - Q1 beat driven by Faroes

Q1 operating EBIT was DKK710m, 5–7% above our estimate and consensus, with the beat mainly driven by Faroes Farming. Management comments suggest a continued strong biological performance in the sea for Faroes Farming in Q2. The 2024 harvest guidance was unchanged at 66kt from the Faroes and 25kt from the UK. We expect consensus 2024 EPS to come up 0–2% and a similar share price reaction today.

Q1 EBIT +2% on stellar Faroese performance

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.

As good as it gets – down to SELL

Q1e EBIT of DKK 664m (-2% vs. comp.any-collected consensus). '24e/'25e EBIT up 1%/3%, still 6%-13% below consensus. Unattractive valuation and sentiment to turn: SELL (Hold).

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

Boliden (Buy, TP: SEK420.00) - In a sweet spot

Despite low mining volumes, the Q1 results were close to our expectations, thanks to good cost control. We have made significant estimate increases on better metal price and FX assumptions, and beyond 2024 we continue to see additional earnings support from: 1) higher mining volumes due to richer metal grades; 2) normal operations at Rönnskär; and 3) growing profits from the Odda smelter. Our spot-based estimates for 2027 translate to an EV/EBIT of 5.2x, but we see significant upside potential t...

Cambi Minor model adjustments

We have updated our estimates ahead of Cambi’s Q1 report, due on 7 May. We forecast EBITDA of NOK64m and a cash position of NOK383m. Our modelled order intake is NOK298m, primarily reflecting announced orders in Hawaii and Norway. We do not consider these changes to be material, and have not changed our BUY recommendation or NOK20 target price.

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Sector title

Sector title

Boliden (Buy, TP: SEK380.00) - Rosy outlook for copper and gold

Having significantly increased our earnings forecasts, we have raised our target price to SEK380 (320) on higher metal price assumptions, and reiterate our BUY. Acknowledging the operational issues, we still expect a sharp increase in earnings from 2025, due to: 1) higher metal prices; 2) higher volumes due to richer metal grades; 3) normal operations at Rönnskär; and 4) growing profits from the Odda smelter. Our spot-based forecasts for 2027 translate into an EV/EBIT of 6x, but we see significa...

Seafood - Fat Trout Weekly

Seafood - Fat Trout Weekly

Bakkafrost (Hold, TP: NOK590.00) - Strong Q1e coming up

We expect Q1 operating EBIT of DKK666m (8% above consensus of DKK615m), driven by higher harvest volumes, as EBIT/kg margins are broadly in line (our estimated group EBIT/kg is DKK30.8 versus consensus of DKK31.2). Faroe Islands harvested 14.3kt in Q1 and we expect solid average harvest weights, while Scotland harvested 7.3kt. We expect high superior shares in both regions. For the Fishmeal, Oil and Feed segment, we expect EBIT of DKK162m, in line with consensus of DKK164m. The Q1 report is due ...