Land-based fish farming yet to be proven, but large upside for the company that cracks it, says Pareto Securities financial analyst

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Pareto Securities considers land-based fish farming as a “technology case”.

Analyst Carl-Emil Kjølås Johannessen believes there will be record high salmon prices throughout the autumn. But there are still both low and high priced stocks in the sector.

“The salmon market is priced quite high now, but our analysis indicates that Lerøy is trading at a large discount, especially compared to the other heavyweights such as SalMar and Mowi. But the share has risen quite a lot, so it is starting to be somewhat limited upside if you look at the price target we have set,” Johannessen told Norwegian business newspaper, Finansavisen.

He has set a price target of NOK 85 on the Lerøy share.

“Grieg is also cheap, and after they sorted out the balance problem by selling the operation in Shetland, this is also a stock I believe in,” he says.

“As for land-based fish farming such as Atlantic Sapphire and Proximar, this is more of a ‘technology case’. Of course, the price of salmon will have a big impact on their numbers, but here successful operation and little disease at their facility is crucial. If they achieve this, there is a very large upside in such companies,” he believes.

Not all stocks are cheap. Johannessen singles out SalMar and Bakkfrost in particular as high-priced shares where he “struggles to see a particular upside”.