Danske Bank Markets expects salmon prices and earnings of salmon farming companies to recover substantially next year.
“We expect underlying growth in demand for salmon to pick up, much like when Norway was banned from the Russian market overnight in 2014,” the investment bank wrote in a report according to TDN Direkt.
Danske Bank estimates an average salmon price in 2020 of NOK 56 per kilo due to three factors. First, the timing of the virus outbreak was “good”, as harvest volumes were already expected to be low in the first half of 2020. Furthermore, the weaker Norwegian kroner is positive for achieved prices, while lower prices have historically increased consumption. In Asia, demand is also expected to pick up, which is supportive of salmon prices.
Danske Bank’s sector favourites are Bakkafrost and SalMar, with price targets of NOK 570 and 436 respectively.
