Lerøy Seafood Group and Austevoll Seafood both posted their latest Q4 statements on Tuesday.
“Overall, Lerøy delivered a mixed quarter. Operational EBIT ended at NOK 948 million (EUR 97 million), well below (12 per cent) Sparebank1 Markets and consensus between NOK 1,074-1,076 million (EUR 109-110 million),” wrote Sparebank1 Markets salmon analyst Tore A. Tønseth in a stock market comment.
As a direct consequence of this, Lerøy is down 5.9 per cent, while the parent company Austevoll Seafood fell by 6.1 per cent after half an hour of trading on the Oslo Stock Exchange.
“Although LSG’s fourth quarter is somewhat on the weak side, production cost in region North and West is in line with our estimates, and LSG reiterates the potential for cost reduction in both regions,” continued Tønseth, who has a buy recommendation on Lerøy shares.
“We expect our 2019 estimates slightly down after this report (2-3%). We consider the large proportion trout this quarter to be one-off and although there is higher cost in region Midt this quarter, LSG continues to see cost reduction potential in 2019. We also find the LSG share attractive at 11-12x P/E 2019,” he added.
Sparebank1 Markets has a price target of NOK 80 (EUR 8.1) for Lerøy Seafood Group. The share was last traded at NOK 64.90 (EUR 6.6).
Pareto Securities, which has a buy recommendation with a price target of NOK 90 (EUR 9.1) on Lerøy, was also not satisfied with the figures.
“Lerøy Midt in particular disappointed with an EBIT / kg of NOK 16.3 (EUR 1.6) against our estimate of NOK 20.3 (EUR 2),” said Pareto-analyst Carl-Emil Kjølås-Johannessen in an update.
