Investment bank downgrades the stock after disappointing Q2 report.
Carnegie downgrades Grieg Seafood to Sell, from previous Hold. At the same time, the price target is reduced to NOK 70 per share, from the previous NOK 92, according to from an analysis on Monday according to TDN Direkt.
Read also: Grieg Seafood hit by lower prices and continued high costs in Q2
«With significantly higher costs than the competition, the company’s operational leverage against rising salmon prices is attractive. Unfortunately, the second half of 2020 will be weak, with an estimated EBIT of NOK -113 million in the third quarter and NOK 85 million in the fourth quarter. With increased working capital and investments of NOK 600-1,000 million in the same period, cash burn will reduce the flexibility in the balance sheet, which will have negative ripple effects into 2021 and beyond », wrote analyst Lars Konrad Johnsen.
Grieg Seafood falls 0.3 percent, to NOK 92.15, on an otherwise positive Oslo Stock Exchange on Monday morning.
