Verdsettelse av Salmon Evolution ASA

Abstract

This bachelor´s thesis focuses on the valuation of Salmon Evolution ASA, a company specializing in land-based farming of Atlantic salmon. The objective of this thesis is to determine the fundamental equity value as of December 31, 2023. We conduct a comprehensive analysis of both external and internal factors affecting the company. Using the PESTEL framework, we evaluate political, economic, social, technological, environmental, and legal factors. In addition, we apply the models Porter's Five Forces and VRIO before summarizing with a SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats.

To gain a deeper understanding of Salmon Evolution's financial health, we conducted a financial analysis including profitability and liquidity assessments. The weighted average cost of capital (WACC) was calculated to be 8.72%. Using the Discounted Cash Flow (DCF) method, we estimated future cash flows and terminal value, resulting in a calculated share price of NOK 10.46. This suggests that the stock was undervalued compared to the market price of NOK 6.78 as of December 31, 2023

In addition to the fundamental valuation, we conducted a comparative valuation and a Monte Carlo simulation to assess the uncertainty and risk associated with our estimates. Finally, we conducted a sensitivity analysis to demonstrate how changes in key factors such as growth, required rate of return, and salmon prices impact the valuation.

The results of our analyses suggest that Salmon Evolution may have significant growth potential, partly due to their high proportion of superior quality salmon at 96% (Salmon Evolution, 2024). However, it is important to note that there is considerable risk associated with investments in this sector, particularly regarding technological innovations and market dynamics. The company's innovative approaches and strategic initiatives position it well to capitalize on market opportunities, but considerable uncertainty remains.