Trade friction hits forecasts, but DNB eyes buying opportunity in aquaculture

DNB Markets trims salmon estimates but sees improved sector outlook.

DNB Markets has lowered its short-term price forecasts and earnings estimates for the global salmon farming sector, citing a slowdown in demand growth linked to escalating trade tensions. However, the investment bank sees a more favourable risk/reward outlook following recent share price corrections and has upgraded its recommendations on several listed salmon producers.

In a sector note published Tuesday, the brokerage revised down its global demand estimates for 2025–2027 and reduced its spot salmon price assumptions. Still, it expects better biological performance to offset some of the negative pricing impact.

“The negative price effect is partly mitigated by reduced mortality, which increases volumes and lowers costs, resulting in EPS cuts of 11–2 percent,” DNB Markets wrote.

Despite the downgrade in earnings expectations, the firm highlighted the sector’s historic resilience to past downturns and said recent share price declines leave stocks attractively valued. “We see significantly improved risk/reward,” the analysts noted.

At current levels, salmon farming stocks are trading at 9.2 to 10.7 times projected earnings for 2026–2027, according to DNB Markets. This metric, known as the forward price-to-earnings (P/E) ratio, reflects how much investors are paying today for every unit of future profit. The brokerage views this as attractive, suggesting that despite near-term challenges, the sector may be undervalued relative to its long-term earnings potential.

As a result, DNB upgraded Mowi, Grieg Seafood, and Bakkafrost to “buy” from “hold”, with Mowi and Lerøy Seafood identified as top picks.

The bank sees the anticipated supply increase in 2025 as a temporary rebound from weak 2024 levels. While Norway’s new aquaculture policy — the Havbruksmeldingen — may constrain supply growth in the short to medium term, DNB believes it could pave the way for more sustainable expansion longer term.

New DNB recommendations and target prices include:

The report follows recent pressure on salmon shares amid concerns over regulatory shifts in Norway and shifting global trade dynamics. While DNB expects 2025 to be a weaker year for earnings, it sees valuation levels as supportive for long-term investors.