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Difference in salmon farming valuations 'has rarely been higher'

Salmon farming companies listed on the Oslo Stock Exchange are expected to continue to benefit from a "strong development," according to analysts at Pareto Securities, but companies' valuations are farther apart than ever.

"We believe the valuation of some companies is somewhat stretched," the firm wrote.

Shares in the sector are trading at 12 to 15 times their 2019-2020 earnings per share, "but the differences between comparable companies has rarely been higher," analysts report.

The report lists Leroy Seafood and Salmones Camanchaca as sector favorites.

Leroy's valuation is 30 to 45 percent lower than 2019-2020 multiples compared to Mowi and Bakkafrost, analysts noted.

Among the changes are a sell recommendation for Bakkafrost and a buy recommendation for Salmar.

Pareto Securities recommendations:

Company Recommendation Target price (NOK) Previous target (NOK)
Akva Group Buy 85 85
Atlantic Sapphire Buy 130 130
Austevoll Seafood Buy 135 135
Bakkafrost Sell (from Hold) 455 455
Grieg Seafood Buy 145 145
Lerøy Seafood Group Buy 82 83
Mowi Hold 220 220
Norway Royal Salmon Buy 230 230
Salmones Camanchaca Buy (from Hold) 90 95
Salmar Buy (from Hold) 460 460
SSC Hold 25 23,50


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