Norwegian fish farmer Grieg Seafood has increased NOK 5.7 billion (€579.9 million) in market value.
Hardly anyone had thought that the spot price would rise by 100 percent from the turn of the year to the end of April. But it has happened and it hits the bottom lines of the farming companies very hard.
Grieg Seafood has traditionally been a high-cost producer and has over time delivered weaker margins than the most well-run fish farming companies, such as Bakkafrost and SalMar. Precisely for this reason, a price jump has a relatively stronger effect on the results for them.
The margin improvement inflates earnings, which in turn raises the share price.
So far this year, the Grieg share has risen by 67 percent. No other salmon shares on the Oslo Stock Exchange can match that.
According to consensus estimates, Grieg Seafood will be able to earn NOK 1,675 million (€170.4 million) at EBITDA level in 2022. This is more than double from 2021, when EBITDA landed at NOK 818 million (€83.2 million).
Of the nine analysts who have coverage on the Grieg share, seven have a buy recommendation, while one has a neutral and one has a negative recommendation. The average price target is NOK 125.
The share price has already distanced itself from the price targets. On Friday morning, Grieg is traded at NOK 140.40, which gives a market value of NOK 16 billion (€1.6 billion).