In this equity research report, analysts Vilhelm Bornefalk and Mary Darbinyan, take a closer look at Måsøval, a Norwegian salmon farming company. Since a tax proposition by the government on farmed salmon the share prices of the entire industry went down, and the unjustifiable regulatory risk still lingers over Måsøval despite industry leading margins. With sustainable practices and below-industry-average morality, escape and lice infestation rate, the company is in a strong position to capitalize on a growing market heading towards a sustainable future. Harvesting output is estimated to grow 67.4% from 2022 to 2027E, contributing to a revenue CAGR of 13.7%, while the EBIT-margin of 44.0% is estimated to remain during the period. The target price of NOK 45.5 is based on an equally weighted average between a DCF and a peer valuation and implies an upside of 49%.
Investments highlights
- Mösøval is strongly positioned to benefit from the sustainable market tailwind
- Måsøval possess the ability to withstand the setback the resource rent tax
- Unjustified fear of the resource rent tax creates re-rate potential