Most to be gained from the weakest performers

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Sparebank 1 Markets envisages a tight salmon market in the new year.

“We see the largest upside in the companies that are perceived to report the highest costs, such as Lerøy Seafood, Grieg Seafood and Norway Royal Salmon,” said salmon analyst Knut-Ivar Bakken in SpareBank 1 Markets to business newspaper Finansavisen.

On average, salmon shares were significantly weaker than the total index on the Oslo Stock Exchange in 2021. Weaker price developments than expected in late autumn lowered salmon stock returns at the end of the year.

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Source: Infront

But things will get better this year, according to Sparebank 1 Markets, which has a buy recommendation on all shares in the sector.

For 2022, the analyst corps expects an average salmon price of NOK 62 (€6.20) per kilo – a tangent of the level from the peak year 2016. There is a marked increase from 2021, when the price ended at NOK 57.20 (€5.70).

Sparebank 1 Markets is above consensus in its estimates for the salmon price this year.

“We expect a salmon price of NOK 63.50 (€6.30) per kilo in 2022. This is due to an expectation of low supply growth, continued strong demand for salmon in stores and a further normalisation in demand from the restaurant market,” said Bakken, who added that he believes prices will remain strong in 2023 and 2024.

DNB Markets forecasts a global supply growth of salmon of a modest two per cent in 2022 – down from eight per cent in 2021. A lean supply side normally means rising salmon prices.