Norwegian investment bank Sparebank 1 Markets has adjusted its forecasts for the salmon farming sector, citing short-term challenges related to infectious salmon anemia (ILA) and elevated salmon lice levels.
The bank expects these factors to negatively impact 2024 results, leading to lower prices and higher costs per kilogram.
“While we expect a 36% growth in operational results for salmon farmers in 2025, driven by less quality downgrading and lower farming costs, we believe the consensus estimates for Q3 2024 are too high,” Sparebank 1 Markets stated in its sector report, according to TDN Direkt.
The investment bank estimates average spot prices at NOK 71 ($6.66) per kilo for Q3 2024 and has raised farming cost assumptions due to lower harvest weights in the latter half of the quarter.
Despite these near-term concerns, Sparebank 1 Markets remains bullish on the sector in the long term, driven by low to moderate global supply growth and the potential of new production methods such as closed and offshore facilities.
The bank has lowered its price target for Grieg Seafood to NOK 74 ($6.94), down from NOK 92 ($8.62), but reiterated its buy recommendation. It also maintains buy recommendations and price targets for other farming companies.
