Expensive production growth will come offshore.
In the wake of yesterday’s first quarterly report, the investment bank, SEB, reduces its price target on the SalMar share to NOK 452 from the previous NOK 470 and reiterates a hold recommendation.
Read also: SalMar posts all time high operating profit
“SalMar’s goal is to increase volumes over the next 3-5 years involving new offshore capacity and to upgrade the value chain to become more productive. New investments trumps dividends for 2020,” SEB writes in an analysis report according to TDN Direkt.
The investment bank estimates earnings per share of NOK 21.7 in 2020. In 2021, assuming that most markets return to normal, SEB analysts estimate earnings per share of NOK 25.3.
On Wednesday morning, SalMar’s shares traded at NOK 450 on the Oslo Stock Exchange. This implies a P / E (price/earnings – reporting) of 20.7 and 17.8 respectively, which cannot be considered very cheap.
At the same time, Arctic Securities is upgrading SalMar to buy from hold, raising the price target to NOK 500 per share, from previously NOK 420.
“The company did significantly better than its competitors in the quarter, as the company avoided winter wounds on the fish. We have fine-tuned the estimates and believe that the better development of the company against competitors will last several quarters ahead,” writes the brokerage in a report.
