Investment banks believe Mowi will more than triple its profit in 2021

Aslak Berge

Mowi’s share price has been under severe pressure over the past year. But the problem is transient, say analysts covering the company.

For the salmon giant, a clear predominance has positive recommendations. Eight have a BUY recommendation, three HOLD and a SELL. The average price target is NOK 185. The lowest is NOK 140, while the highest is NOK 212.

According to consensus estimates, stated by Infront, Mowi will net earn EUR 163 million, or EUR 0.32 per share, in 2020. But in 2021, Covid-19 trouble will be washed out of the accounting books and the result will be much better.

The investment banks predict average earnings per share of EUR 1.09 in 2021. Since Mowi shares have been traded at NOK 188, this implies a 2021-P/E of 16.6.

2022 will be even better, say the analysts. Earnings per share of EUR 1.23 are expected.

Among those buying analysts’ argumentation and predominantly positive recommendations is the Belgian GBL, which over Christmas consolidated its position as the farming company’s third-largest owner.

Pareto Securities earlier today downgraded Mowi shares from BUY to HOLD. The investment banker’s sector favourite is Lerøy Seafood. Pareto expects that the operational improvement of Lerøy Seafood will continue and believes the current valuation discount against comparable companies is too great.

The salmon price is expected to remain under pressure in the first quarter as a result of continued high supply growth from Norway and Chile, combined with weak demand prospects, the analysis shows. However, Pareto expects the offer to tighten significantly into the second half of 2021, mainly driven by reduced volume from Chile, but also lower growth in Norway.

The majority of investment banks covering the salmon sector have had positive recommendations on Mowi over the past year. In the same period, however, the share price has fallen heavily, precisely by 17 per-cent.

Mowi will present its full-year results for 2020 on the 17th of February.


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