Seafood producer Tassal (ASX:TGR) got a nice 5.33% share price bump on no news today – so what gives?

According to Goldman Sachs, the company’s main competitor Huon Aquaculture (ASX:HUO) plans to sell out to Brazilian-based meat giant JBS for A$425 million.

“All else equal, the offer by JBS for HUO would imply a valuation for TGR of A$7.12 and A$5.30 based on FY21 and FY22 multiples of 12.7x/8.9x,” Goldman Sachs said.

“We are Buy-rated on TGR with a A$4.10 12-month TP.”

Considering the last close on Friday 6th August was A$3.38 – this implies a 21% upside.

“[TGR] is our preferred aquaculture stock as it offers good exposure to the recovering Atlantic Salmon and Prawn markets globally, with less balance sheet risk.”

The outlook for Tassal’s prawn production is looking good.

In May, the company acquired Mid Farm, an 800-hectare property neighbouring its existing Proserpine prawn farm and Billy Creek property.

It’s expected to provide the foundation for Tassal’s Strategic platform to deliver 20,000 tonnes of prawns per year.

 

 

 

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