Port of Tauranga Delivers a Robust Result Amid Challenging Operating Conditions, FVE Increased 3%

We raise our fair value estimate for wide-moat Port of Tauranga 3% to NZD 4.45 on the time value money and upgraded near-term earnings forecasts. Port of Tauranga upgraded fiscal 2021 NPAT guidance to NZD 94 to 100 million from NZD 86 to 93 million as trade conditions improve quicker than management previously expected. The midpoint of guidance is 3% higher than fiscal 2020 NPAT. We upgrade our fiscal 2021 NPAT forecast 7% to NZD 97 million but our long-term expectations remain largely unchanged. Shares remain materially overvalued relative to our fair value estimate, currently trading at a forward fiscal 2021 enterprise value/EBITDA of 31 and offering a paltry dividend yield of 1.7%, fully imputed. Port of Tauranga is a good quality company with a long growth runway. But the market price is too lofty in our opinion.