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>Mercury's (MCY) 3Q24 operating metrics are best described as steady, with the benefits of its new wind farms evident as they offset softer (but still above average) hydro generation.</li><li>Pricing across all product categories remains strong and our upwards forecast movements is due to a combination of a higher forward wholesale electricity price, and gas and telco prices rising faster than expected.</li><li>We raise our target price +15cps (+2.9%) to NZ$5.35, but retain our UNDERPERFORM rating as MCY remains expensive. </li></ul>

Mercury's (MCY) 3Q24 operating metrics are best described as steady, with the benefits of its new wind farms evident as they offset softer (but still above average) hydro generation.Pricing across all product categories remains strong and our upwards forecast movements is due to a combination of a higher forward wholesale electricity price, and gas and telco prices rising faster than expected.We raise our target price +15cps (+2.9%) to NZ$5.35, but retain our UNDERPERFORM rating as MCY remains expensive. 

Mercury - 3Q24 Op Stats — Favourable Tailwinds External Inbox Updates

<ul><li>Appearances can be deceptive. Mercury (MCY) reported a strong 1H24 EBITDAF result of NZ$434m, albeit at first glance it appears soft vs. 1H23 and our expectations.</li><li>In addition, the FY24 guidance upgrade appears very strong, but rising opex is masked by gains that cannot be banked on to repeat in future years.</li><li>Whilst we lift our FY24 EBITDAF forecast +5.3%, as FY24 is tracking ahead of expectations, we lower our target price -8cps (-1.5%) on higher long-term opex and stay-in-business capex assumptions. </li></ul>

Appearances can be deceptive. Mercury (MCY) reported a strong 1H24 EBITDAF result of NZ$434m, albeit at first glance it appears soft vs. 1H23 and our expectations.In addition, the FY24 guidance upgrade appears very strong, but rising opex is masked by gains that cannot be banked on to repeat in future years.Whilst we lift our FY24 EBITDAF forecast +5.3%, as FY24 is tracking ahead of expectations, we lower our target price -8cps (-1.5%) on higher long-term opex and stay-in-business capex assumptions. 

Mercury - Trading Comes With a Cost — 1H24 Result

<ul><li>Mercury (MCY) has reported strong 2Q24 operating statistics, with the key features being strong mass market yield growth and a big jump in wind generation as recently commissioned wind farms and above average wind speeds boost generation volumes.</li><li>We expect MCY to report a strong 1H24 result, only modestly below the record 1H23 result that was aided by record levels of hydro generation.</li><li>We increase our target price +24cps (+4.9%) to NZ$5.13 due to lower interest rates, but MCY remains expensive relative to its peers. UNDERPERFORM.</li></ul>

Mercury (MCY) has reported strong 2Q24 operating statistics, with the key features being strong mass market yield growth and a big jump in wind generation as recently commissioned wind farms and above average wind speeds boost generation volumes.We expect MCY to report a strong 1H24 result, only modestly below the record 1H23 result that was aided by record levels of hydro generation.We increase our target price +24cps (+4.9%) to NZ$5.13 due to lower interest rates, but MCY remains expensive relative to its peers. UNDERPERFORM.

Mercury - Wind Generation Winds Up — 2Q24 Op Stats

<ul><li>Mercury (MCY) reported a watershed result, with FY23 EBITDAF increasing +41% (+NZ$244m) on FY22 to NZ$836m, well ahead of guidance and our forecast.</li><li>Driving the strong performance was record high hydro generation, the Trustpower (TPW) retail acquisition, rising retail yields and Turitea wind farm volumes.</li><li>Looking ahead, FY24 guidance was soft relative to expectations, the main issue being higher opex. </li></ul>

Mercury (MCY) reported a watershed result, with FY23 EBITDAF increasing +41% (+NZ$244m) on FY22 to NZ$836m, well ahead of guidance and our forecast.Driving the strong performance was record high hydro generation, the Trustpower (TPW) retail acquisition, rising retail yields and Turitea wind farm volumes.Looking ahead, FY24 guidance was soft relative to expectations, the main issue being higher opex. 

Mercury - Watershed Result — FY23 Result

<ul><li>Mercury (MCY) has capped FY23 with another quarter of strong hydro generation, lifting total generation above 9TWh for the first time.</li><li>Slightly higher than forecast generation volumes and stronger than expected financial sales pricing has lifted our FY23 EBITDAF forecast +NZ$25m (+3.1%) to NZ$820m, and +NZ$25m above guidance.</li><li>Our target price has increased +6cps (+1.1%) to NZ$5.51. </li></ul>

Mercury (MCY) has capped FY23 with another quarter of strong hydro generation, lifting total generation above 9TWh for the first time.Slightly higher than forecast generation volumes and stronger than expected financial sales pricing has lifted our FY23 EBITDAF forecast +NZ$25m (+3.1%) to NZ$820m, and +NZ$25m above guidance.Our target price has increased +6cps (+1.1%) to NZ$5.51. 

Mercury: Hydro Power Does It Again — 4Q23 Op Stats

New Zealand

Mercury NZ Ltd provides utility services. The Company generates and supplies electricity from hydro, geothermal, gas-fired, and wind power stations, as well as owns and manages bio-energy power plants. Mighty River Power serves customers throughout New Zealand.

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Mercury NZ Ltd (MCY NZ)

Mercury - 3Q24 Op Stats — Favourable Tailwinds External Inbox Updates

Mercury's (MCY) 3Q24 operating metrics are best described as steady, with the benefits of its new wind farms evident as they offset softer (but...

Forsyth Barr

Mercury - Trading Comes With a Cost — 1H24 Result

Appearances can be deceptive. Mercury (MCY) reported a strong 1H24 EBITDAF result of NZ$434m, albeit at first glance it appears soft vs. 1H23 and...

Forsyth Barr

Mercury - Wind Generation Winds Up — 2Q24 Op Stats

Mercury (MCY) has reported strong 2Q24 operating statistics, with the key features being strong mass market yield growth and a big jump in wind...

Forsyth Barr

Mercury - Watershed Result — FY23 Result

Mercury (MCY) reported a watershed result, with FY23 EBITDAF increasing +41% (+NZ$244m) on FY22 to NZ$836m, well ahead of guidance and our...

Forsyth Barr

Mercury: Hydro Power Does It Again — 4Q23 Op Stats

Mercury (MCY) exceeded expectations with strong hydro generation and financial sales pricing, leading to a +3.1% increase in FY23 EBITDAF forecast...

Forsyth Barr

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