Nordea Markets downgrades Atlantic Sapphire – and cuts the price target by 60 per cent

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Nordea Markets lowers Atlantic Sapphire from buy to hold rating.

The underlying “fair value” is estimated at NOK 50 per share – down from NOK 125. It appears from an update on Monday according to TDN Direkt.

The investment house writes that the company’s first half-year report was disappointing. Sales are in line with expectations, which implies a price achievement of around NOK 100 per kilo from the Miami plant, but the costs were significantly higher than expected.

Furthermore, the harvest prospects for the next 12 months are disappointing, and a production of the phase 1 development with full capacity will now only be late in 2022, it is said.

Nordea Markets now includes a 40 per cent probability of success to the investment bank’s “de-risked valuation” of 13 times 2026 earnings.