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SalMar once again demonstrated its stellar operational performance with a significant earnings beat. The proposed NOK 13 DPS to be paid in Q4/20 as well as the 2021 volume guidance were also supportive. We have implemented our new price assumptions, and our EPS estimates are down by a modest 2% and 3% for 2020 and 2021 respectively. SalMar’s valuation reflects its stellar performance in our view, and we stick to our Hold rating and our NOK 525 TP.
Companies: SalMar ASA
Arctic Securities
Q3/20 EBIT of NOK647m (Arctic: NOK 515m, Cons.: NOK 485m) Reiterates 2020 volume guiding of 152’t (Norway) and 12’t (Iceland) Introduces 2021 volume guiding of 163’t (Norway) and 14’t (Iceland) Estimates to be revised marginally lower due to new price assumptions
SalMar will release its Q3/20 results on Thursday 12 November, and we now expect an EBIT of NOK 515m (594) – above consensus at NOK 423m. Due to its stellar operating performance relative to peers, it has been our top pick so far in 2020. However, following the strong share price outperformance, we now downgrade the stock to Hold (Buy), but stick to our NOK 525 target price.
SalMar once again outperformed expectations and is the only company during the Q2/20 reporting season with a positive earnings trend. We have only fine-tuned our estimates, but raise our target price to NOK 525 (500). Premium multiples are justified, in our view, as the company both has industry leading operational performance and growth projects supporting volume and earnings growth in the years ahead. We stick to our Buy rating.
Q2/20 EBIT of NOK 882m (Arctic NOK 865m, Cons.: NOK 757m) FY/20 volume guiding reiterated at 152’t Cost guiding for Q3/20: Stable Central Norway, slightly higher in North 2020 estimates more or less unchanged
SalMar will release its Q2/20 results on Thursday 27 August. We have implemented the harvest volumes announced on 6 July, as well as average prices for the quarter – some NOK 4.4/kg above our previous assumption. We now expect an EBIT of NOK 865m (672) for the quarter vs consensus at NOK 646m. We still expect SalMar will deliver strong operating performance relative to its peers in Q2/20 and we stick to our Buy rating as well as our NOK 500 target price.
SalMar reported a Q1/20 EBIT of NOK 1,065m – in line with our estimate while 7% above consensus. The outperformance vs peers was significant in the quarter as the company steered clear of winter wounds. We have only fine-tuned our estimates and they hence hold up well relative to peers. We find such outperformance likely also in the next few quarters, and we upgrade the stock to Buy (Hold) and raise our target price to NOK 500 (420).
Q1 EBIT of NOK 1,065m (Arctic: NOK 1,065m, Cons.: NOK 998m) FY/20 volume guiding reiterated at 152’t (152) Guides for lower costs Q/Q in Q2/20 Minor estimate changes expected – high quality set to continue
SalMar just announced the proposed FY/19 dividend is cancelled Both due to uncertain effects of the corona virus in the value chain.. ..as well as to ensure strategic investments such as offshore farming Negative, and could also imply risk of others following
SalMar delivered Q4 results significantly below expectations following an early harvest in Central Norway, impacting both realized prices and costs. The company expects stable costs going into Q1/20 – above our previous assumptions, and we have lowered our 2020 estimates by 8%. The DPS of NOK 21 represents a yield of 5.0% - one of the best in the sector. We stick to our Buy rating while lowering our target price to NOK 460 (500) following our earnings revision.
Research Tree provides access to ongoing research coverage, media content and regulatory news on SalMar ASA. We currently have 7 research reports from 2 professional analysts.
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