Danske Bank analysts raise price targets as demand higher than expected

Aslak Berge

Danske Bank Markets upgraded its recommendations to SalMar, Norway Royal Salmon (NRS), Austevoll Seafood and Bakkafrost. In addition, the brokers benchmark adjusted this to all companies involved.

SalMar and Bakkafrost are upgraded in the report from sell to hold and NRS and Austevoll are upgraded from buy to hold According to TDN Finans, a sector report was published Monday afternoon.

Salmon stocks are rising significantly on the Oslo stock exchange today. Austevoll Seafood is up 7.3 percent, in front of Bakkafrost (5.3 percent) and NRS (4.9 percent).

Here are Danske Bank’s new price targets:

  • SalMar:  NOK 432 from NOK 339
  • Bakkafrost:  NOK 504 from NOK 454
  • NRS:  NOK 257 from NOK 218
  • Austevoll Seafood: NOK 149 from NOK 113
  • Marine Harvest: NOK 236 from NOK 196
  • Lerøy Seafood Group: NOK 83 from NOK 68
  • The Scottish Salmon Company: NOK 24 from NOK 14
  • NTS: 77 NOK from NOK 61

The reason for the higher price targets is due to the fact that Danske Bank Markets expects the demand salmon to increase faster than the supply over the next three to four years. The broker now expects an average salmon price of NOK 62.50 (EUR 6.6) per kilo in 2019 and NOK 65 (EUR 6.8) in 2020.

“The price of salmon is higher than expected. We see fast growing salmon consumption in most markets as soon as prices fall to around NOK 55. We find it reassuring that Norwegian salmon exports to France are back at 2016 levels despite significantly higher retail prices,” Danske Bank wrote.

Danske Bank sees upside potential for Grieg and SSC.