Norwegian Salmon Farmers: Mowi top pick on growth prospects - Barclays

Leroy Seafood ASA

28/09/2021 11:21

** With hotel, restaurant and catering demand recovering
from the pandemic, the market is looking for continued pricing
and margin recovery for salmon farmers in H2 and 2022, Barclays
says, seeing this as a realistic base case
    ** If demand for salmon remains robust and hence operational
cost inflation can be limited, a strong improvement in salmon
producers' margins and returns over the next few years could be
seen, it points out 
    ** The brokerage expects relative performance on key
environmental, social and governance (ESG) risk factors,
particularly fish health and sustainability of feed, to
increasingly become an important determinant of financial
performance and total shareholder return
    ** It initiates three largest Norwegian-based salmon farmers
Mowi  MOWI.OL  ("overweight), Leroy Seafood  LSG.OL 
("underweight") and SalMar  SALM.OL  ("equal weight")
    ** The broker's preferred name is Mowi due to the company's
best-in-class ESG positioning -- it sees a positive inflection
in Mowi's relative growth prospects
    ** It sees Leroy Seafood more vulnerable to potential
oversupply scenarios and views wildcatch exposure as dilutive
    ** Barclays says SalMar is relatively less impacted by price
volatility, however unclear regulatory framework and cost per
licence for offshore could materially impact the overall
economics of its investment


 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))