New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Strong hydrology, wind, and wholesale electricity prices have combined to produce a strong March 2024 and 3Q24 operating performance for Meridian Energy (MEL), with that momentum expected to flow through to 4Q24.</li><li>We have lifted our FY24 EBITDAF and dividend forecast +NZ$53m (+6%) and +0.4cps (+2%) respectively, driving our +4% (+20cps) increase in target price to NZ$5.25.</li><li>The changes are largely short-term operational benefits, so the longer-term outlook is little changed. </li></ul>

Strong hydrology, wind, and wholesale electricity prices have combined to produce a strong March 2024 and 3Q24 operating performance for Meridian Energy (MEL), with that momentum expected to flow through to 4Q24.We have lifted our FY24 EBITDAF and dividend forecast +NZ$53m (+6%) and +0.4cps (+2%) respectively, driving our +4% (+20cps) increase in target price to NZ$5.25.The changes are largely short-term operational benefits, so the longer-term outlook is little changed. 

Meridian Energy - It's W3 — Wind, Water and Wholesale Prices

<ul><li>Meridian Energy (MEL) delivered a record 1H24 operating result for its New Zealand operations, with strong retail margin growth underpinning the increase in earnings.</li><li>Whilst ongoing opex challenges took some of the shine off, the outlook for the remainder of FY24 is positive as MEL and the rest of the industry await the NZAS decision (which will hopefully be in the next few months).</li><li>Forecasts, target price, and our investment view are little changed. UNDERPERFORM.</li></ul>

Meridian Energy (MEL) delivered a record 1H24 operating result for its New Zealand operations, with strong retail margin growth underpinning the increase in earnings.Whilst ongoing opex challenges took some of the shine off, the outlook for the remainder of FY24 is positive as MEL and the rest of the industry await the NZAS decision (which will hopefully be in the next few months).Forecasts, target price, and our investment view are little changed. UNDERPERFORM.

Meridian Energy - Sun Shines on Electrification — 1H24 Result

<ul><li>Meridian Energy (MEL) has closed out 1H24 with a (slightly) soft month operationally, due mainly to below average hydro generation.</li><li>Despite the soft finish, we expect 1H24 to come in ahead of 1H23 with the key drivers higher wholesale electricity prices and retail margins. </li><li>Opex remains a concern and is running +2% above the top of MEL's FY24 guidance range. </li></ul>

Meridian Energy (MEL) has closed out 1H24 with a (slightly) soft month operationally, due mainly to below average hydro generation.Despite the soft finish, we expect 1H24 to come in ahead of 1H23 with the key drivers higher wholesale electricity prices and retail margins. Opex remains a concern and is running +2% above the top of MEL's FY24 guidance range. 

Meridian Energy - Treading Water — 1H24 Operating Statistics

<ul><li>Meridian Energy's (MEL) 1Q24 is best described as solid, with continued strong retail margins partially offset by rising opex costs that on an annualised basis are tracking above MEL's guidance range.</li><li>The news MEL is investing in NZ Windfarms (NWF) is a good outcome for NWF shareholders, but does not move the dial for MEL and only adds to growing overbuild concerns.</li><li>MEL remains expensive. UNDERPERFORM.</li></ul>

Meridian Energy's (MEL) 1Q24 is best described as solid, with continued strong retail margins partially offset by rising opex costs that on an annualised basis are tracking above MEL's guidance range.The news MEL is investing in NZ Windfarms (NWF) is a good outcome for NWF shareholders, but does not move the dial for MEL and only adds to growing overbuild concerns.MEL remains expensive. UNDERPERFORM.

Meridian Energy - Margins Beating Costs—1Q24 Op Stats

<ul><li>As we have become accustomed to, Meridian Energy (MEL) delivered a FY23 result in line with expectations.</li><li>The key feature of the result was FY24 cost guidance higher than expected, both opex and capex.</li><li>A combination of inflation and increased IT spend are the main culprits. We trim our target price -5cps (-0.9%) to NZ$5.25. </li></ul>

As we have become accustomed to, Meridian Energy (MEL) delivered a FY23 result in line with expectations.The key feature of the result was FY24 cost guidance higher than expected, both opex and capex.A combination of inflation and increased IT spend are the main culprits. We trim our target price -5cps (-0.9%) to NZ$5.25. 

Meridian Energy - Costly Repeat — FY23 Result

New Zealand

Meridian Energy Ltd. operates as a state-owned electricity generator. The Company produces hydro-electric power and supplies electricity to residential, business, and rural customers. Meridian Energy provides services throughout New Zealand.

Meridian Energy (MEL NZ)

Meridian Energy - It's W3 — Wind, Water and Wholesale Prices

Strong hydrology, wind, and wholesale electricity prices have combined to produce a strong March 2024 and 3Q24 operating performance for Meridian...

Forsyth Barr

Meridian Energy - Sun Shines on Electrification — 1H24 Result

Meridian Energy (MEL) delivered a record 1H24 operating result for its New Zealand operations, with strong retail margin growth underpinning the...

Forsyth Barr

Meridian Energy - Treading Water — 1H24 Operating Statistics

Meridian Energy (MEL) has closed out 1H24 with a (slightly) soft month operationally, due mainly to below average hydro generation. Despite the...

Forsyth Barr

Meridian Energy - Margins Beating Costs—1Q24 Op Stats

Meridian Energy's (MEL) 1Q24 is best described as solid, with continued strong retail margins partially offset by rising opex costs that on...

Forsyth Barr

Meridian Energy - Costly Repeat — FY23 Result

As we have become accustomed to, Meridian Energy (MEL) delivered a FY23 result in line with expectations. The key feature of the result was FY24...

Forsyth Barr