Analyst Kjetil Lee says that the war in Ukraine affects the salmon companies negatively, but in total, Handelsbanken expects limited effects for the salmon industry.
“The aquaculture industry is primarily affected through lower demand. Russia and Ukraine make up about four percent of the salmon market, while air freight for Asian markets are affected. Furthermore, a stronger Norwegian krone and higher feed costs will be negative for the fish farmers,” he says to E24.
For the long-term investor, Lye believes that it can be good times to buy salmon shares now.
Based on the outlook for the sector, he sees upside potential in the valuation of the fish farming companies, and highlights Lerøy, SalMar and Mowi as good investment opportunities.
“All companies provide good exposure to what we expect will be a strong salmon market in 2022-23. Negative supply growth in 2022 and prospects for low global supply growth in the following years will contribute to high salmon prices and good earnings in the fish farming companies,” says Lye.