Barclays sees calmer waters for Norwegian fish farmers in 2024
19/01/2024 09:27
** Barclays turns positive on the Norwegian salmon sector,
saying tight supply boosts fish prices, while investors concerns
over the resource rent tax are now largely over
** Since the tax is lower than initially feared and their
balance sheets are in relatively strong shape, fish farmers
could step up cash returns, the broker says
** As salmon companies have only partially recovered their
share price performance after the tax turmoil, the valuations
are attractive vs broader European stables sector, it adds
** The broker ups Salmar SALM.OL to "equal weight" from
"underweight", Mowi MOWI.OL to "overweight" from "equal
weight" and Leroy Seafood LSG.OL to "overweight" from
"underweight"
** It highlights Mowi's geographical diversification, volume
guidance, growing consumer products exposure that cuts down
volatility, and scope for visibility and innovation
** Barclays says it believes in Leroy's gradual EPS recovery
in 2024 after biological challenges in 2023 affected volumes,
adding the company's targets are ahead of consensus
** The broker says Salmar is "the best-in-class salmon
farmer from a cost perspective", but notes it's valued at a
premium vs peers
** Shares in all three companies are up 2.2%-4.2% in
mid-morning trade
(Reporting by Agata Rybska)
((gdansk.newsroom@thomsonreuters.com;))