ABG Sundal Collier has lowered earnings estimates for listed salmon farmers, citing weaker price assumptions and currency effects, according to a sector note published Monday and reported by TDN Direkt.
The bank made small upward revisions to salmon price forecasts in euro terms, but a stronger Norwegian krone results in lower estimates in NOK for 2026 and 2028, with 2027 marginally higher.
Operating profit estimates for 2026 have been reduced by around 5%, driven primarily by lower salmon price assumptions. While 2027 forecasts are broadly unchanged, as higher prices linked to negative supply growth offset rising costs, 2028 operating profit estimates are down 7%. The revisions leave ABG around 9% below consensus on 2026 EBIT, indicating further downside risk to market expectations.
Despite the near-term adjustments, the bank continues to expect strong earnings growth across the sector between 2026 and 2028, forecasting a compound annual growth rate of 36%, supported by low supply growth and a normalisation in prices.
Near-term earnings momentum remains under pressure, with a stronger krone and the risk of renewed cost inflation highlighted as key headwinds. However, the relative cost advantage of salmon compared to other proteins, combined with constrained supply growth, is expected to support pricing over time.
ABG said the summer period may offer a more attractive entry point. The seafood index is down around 12% year to date, suggesting that some of the seasonal weakness and near-term headwinds may already be reflected in valuations.
The bank reiterated SalMar as its top pick, followed by Lerøy Seafood and Mowi, and continues to recommend buying on weakness.
Target price changes and recommendations:
- Austevoll Seafood: Buy, NOK 113 (115)
- Bakkafrost: Hold, NOK 320 (312)
- Grieg Seafood: Hold, NOK 35 (73)
- Kaldvik: Buy, NOK 9 (15)
- Lerøy Seafood: Buy, NOK 56 (57)
- Mowi: Buy, NOK 240 (253)
- SalMar: Buy, NOK 649 (658)