Danske Bank cuts Lerøy Seafood to hold, trims target to NOK 54 on lice, cost outlook.
Danske Bank downgraded Lerøy Seafood to hold from buy and cut its price target to NOK 54 from NOK 60, citing a significant rise in sea lice levels at the company’s sites over the past month and a weaker cost outlook for the fourth quarter and into 2026. The bank said what had looked like a stress test for a reshaped company now appears weaker given higher expected biology-related costs despite a supportive market backdrop.
Lerøy shares traded lower on Tuesday, leaving the stock between its 52-week low and high for the year.
The move follows a cluster of recent revisions across the analyst community. On Tuesday, Norne Securities lowered Lerøy to hold with a NOK 55 target, while Pareto Securities cut its target to NOK 52. Earlier this month, DNB Carnegie raised its target to NOK 68 while reiterating buy. Barclays in September lifted its target to NOK 48 while keeping an underweight stance.
Lerøy reported a third-quarter 2025 harvest of about 59,100 gutted-weight tonnes, above the prior quarter and consistent with guidance that flagged higher volumes. The company has highlighted investments in shielding and submerged farming to manage biology, while noting that high summer sea temperatures increased operational challenges into the third quarter. Full results are due in November.
Sea lice pressure remains a recurring cost driver for Norwegian producers. Exceeding lice thresholds can trigger treatments, potential downgrades and administrative penalties, and raise unit costs if conditions persist.
In September, Lerøy issued a NOK 500 million senior unsecured green bond, adding financial flexibility ahead of seasonal working capital needs.
Danske Bank’s downgrade underscores the risk that elevated lice levels could weigh on margins in the near term even as 2026 earnings are forecast to grow. Investors are balancing higher biological costs against supportive salmon pricing and the company’s volume outlook.
