| dc.description.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. | en_US |
