Valuation Norway Royal Salmon
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- Master of Science 
This bachelor thesis is a valuation of the Norwegian fish farming firm, Norway Royal Salmon (NRS). The purpose is to estimate the fundamental value of NRS’ equity and their fair value per share. The fish farmers in Norway need licenses to farm. These licenses are granted from the Norwegian government with maximum allowed biomass (MAB). The strategic analysis shows that the future for fish farming and the global consumption of salmon is looking very bright. NRS’s performance in the historical period is satisfied as they have performed over average compared to its peers in many of the years in the different ratios. The historical period is also the fundament for the forecast with some adjustments due to the assumed market conditions. The calculation of WACC is based on some assumptions and recommendations from well-known professors. The main valuation approach is the DCF model. This method is the most common approach in valuation, but it needs supplements. The supplements used are multiples and a Monte Carlo simulation. The calculated WACC ended up at 6,13% with an assumed terminal growth rate of 2%. The DCF model is based on a forecasted period of nine years and the estimated enterprise value ended up at 12.702 MNOK. After subtracting the net interest-bearing debt, the estimated market value of equity is 11.186 MNOK as of 01.01.2021. The Monte Carlo simulation claims that the market value is, with 75% certainty, between 8.347 MNOK and 15.057 MNOK. Taking the DCF model, Monte Carlo simulation, and the multiples to mind, it seems that NRS is undervalued in the market. It was only the P/E multiple that recommends selling the NRS share, the other multiples and approaches recommend buying the NRS share. Therefore, I have concluded that the NRS share is undervalued in the market and the investor which has the desire to maximize profitability should buy the share.
Bacheloroppgave i Økonomi og administrasjon fra Handelshøyskolen BI, 2021