Only one salmon farming stock avoids ‘sell’ recommendation.
Investment bank Nordea Markets expects positive global salmon supply growth, and this has already brought salmon prices down 30% from their peak in Q2.
“As we expect the yearly salmon growth rate to accelerate into Q4 and onwards into 2018, we believe prices will remain low. We expect a salmon spot price of NOK 52 per kilo for 2018. This is NOK 8 lower than the 2017 level, with the decline mainly driven by supply growth. We believe the sector is priced too high and we thus stick to our current negative stance,” Nordea analyst Kolbjorn Giskeodegard writes in a 48-page long sector report.
Global supply growth was negative for five consecutive quarters, according to Nordea, but as of Q3, they estimate 10 percent annual growth.
Austevoll Seafood gets a Hold rating, the only one, with most of the others being Sells.
Nordea Markets have had negative recommendations for the salmon farming sector during most of 2017. That has not been the best advice, as the sector has had a strong performance in recent months.