Nordea reduces Mowi price target over belief resource rent tax will be adopted

by
editorial staff

Lowers the price target by NOK 75.

“With around 55 percent of EBIT in Norway, Mowi came out better than its competitors when the Norwegian resource rent tax proposal was announced two weeks ago. Although the proposal has not yet been adopted in the Storting, we are sharply cutting our estimates for 2023 and beyond as we believe it will be adopted, potentially with some changes,” the brokerage house writes in an analysis on Thursday according to TDN Direkt.

Nordea analyst Herman Aleksander Dahl. Photo: Nordea Markets

Nordea Markets has cut its price target on Mowi to NOK 185 from NOK 260, but reiterated its buy recommendation on the share.

On Thursday morning, Mowi is traded at a price of NOK 138.

Fearnley Securities also reduced price targets and estimates, after the government’s proposal for a resource rent tax of 40 percent.

For 2023 and 2024, Fearnley lowered the profit estimates for the affected companies by 32 percent and 29 percent respectively. They argue that the shares are attractively priced, given the price drop, partly because the fundamentals are “rock solid” in the long term.

However, Fearnley downgraded Måsøval to hold from buy, based on the large exposure to Norwegian companies. Mowi is still referred to as the top choice in the sector.

Company Recommendation Course target Upside
---------------------------------------------
AUSS Buy (Buy) 84 (147) 21%
GSF Buy (Buy) 83 (150) 23%
LSG Buy (Buy) 53 (83) 27%
MAS Hold (Buy) 32 (61) 10%
MOWI Buy (Buy) 188(290) 34%
NRS Hold (Hold) 145(250) 11%
SALM Hold (Hold) 343(750) 4%
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