The salmon farmers are in a league of their on the stock exchange.
SalMar’s share has risen by more than 80 percent on the Oslo stock exchange over the last 12 months. It is more than twice as much as most comparable salmon stocks. In addition, they have paid a cash dividend of NOK 19 per share this year.
But analysts are skeptical about the pricing of SalMar’s share, and have been for a long time.
But they’ve missed the target.
Danske Bank Markets recently upgraded the price target of the SalMar share to NOK 339 from previously NOK 327 per share. According to analysts, the sales recommendation is based on relative valuation against comparable companies.
“In our view, the premium is not warranted as we expect lower earnings growth against the most comparable companies in 2019 and 2020 and we believe that a premium on historical operating profit of approximately two pounds per kilograms is not high enough to defend higher valuation multiples in this strong market,” wrote Danske Bank Markets.
“An underlying strong quarter, but valuation is still challenging,” wrote Sparebank1 Markets analyst, Tore A. Tønseth who was following SalMar’s Q2 presentation results. Sparebank1 Markets has a stock recommendation and share price target of NOK 320 on the SalMar share.
Nordea Markets cut the stock target for SalMar at the end of August from NOK 400 to NOK 380 – and maintained stock recommendation.
Pareto Securities also has stock recommendations on SalMar, with a share price target of NOK 345.
Unambiguous and negative investment advice from the brokerages have so far not taken the “bait” of the company’s stock share price. Today, SalMar was trading at NOK 410.