Atlantic Sapphire downgraded due to financial risk

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Investment bank Kepler Cheuvreux is not ruling out share issues after delays and production problems.

Kepler Cheuvreux has downgraded the recommendation on Atlantic Sapphire’s shares to HOLD from BUY, while adjusting the price target to NOK 110 per share, from the previous NOK 146, reported TDN Direkt on Monday, referring to an update from the investment bank.

Atlantic Sapphire released its first-half results last week, and the report was marked by cost overruns and delays. The share price of the pioneering land-based salmon farmer fell heavily at the end of June, having had top listings in January. At lunchtime Monday, Atlantic Sapphire is traded at EUR 99.

Share price Atlantic Sapphire. GRAPH: Infront

Kepler Cheuvreux wrote that since a low growth is expected in the near future, operating investment (capex) is low, but final capex will depend on capex per kilogram in phase 2.

“We do not rule out that the company will raise capital, but we now assume that lower capex will result in sufficient funding at the moment. We are downgrading the recommendation to HOLD because of the financial risk,” the investment bank wrote.