New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<ul><li>The earnings downgrade cycle at Freightways (FRW) is continuing, though the drivers outlined in its trading update reflect more temporary rather than structural cost related headwinds.</li><li>Moreover, volume comparatives ease in 4Q23 following the cycling of Omicron impacted 3Q22, where residential parcel volumes were elevated.</li><li>We retain an OUTPERFORM rating in light of (1) medium to long-term organic growth potential, (2) the scope for accretive acquisitions, and (3) a one year forward PE multiple discount to the NZX50.</li></ul>

The earnings downgrade cycle at Freightways (FRW) is continuing, though the drivers outlined in its trading update reflect more temporary rather than structural cost related headwinds.Moreover, volume comparatives ease in 4Q23 following the cycling of Omicron impacted 3Q22, where residential parcel volumes were elevated.We retain an OUTPERFORM rating in light of (1) medium to long-term organic growth potential, (2) the scope for accretive acquisitions, and (3) a one year forward PE multiple discount to the NZX50.

Freightways Ltd

Freightways: One-Offs to Weigh on 2H23