Danske Bank downgraded Bakkafrost to sell from hold on Friday, cutting its 12-month price target to NOK 436 from NOK 515.
Bakkafrost has underperformed peers over the past 12 months, with its share price declining 5.5% despite the company’s historically low production costs.
Danske Bank has now downgraded its recommendation on Bakkafrost to sell from hold and cut its 12-month price target to NOK 436 (€39.24) from NOK 515 (€46.35), according to an analysis seen by TDN Direkt.
The bank cited rising input costs as a key risk factor. Pelagic raw material prices have increased by 48% year on year, leaving Bakkafrost more exposed than peers due to its relatively high use of marine ingredients in feed.
Danske Bank also noted that the company holds limited inventory, reducing its ability to mitigate the impact of higher input costs.
“Based on a relative underperformance, expectations of limited price premiums, lower salmon prices and a cost risk, we downgrade the recommendation from hold to sell and adjust our 12-month price target from NOK 515 to NOK 436,” the bank said.
The downgrade reflects a combination of weaker price expectations and rising cost pressures, which are expected to weigh on margins relative to other listed salmon producers.