Manawa Energy: Positive Earnings Trend; Stock Looks Attractive

We increase our fiscal 2024 EBITDA forecast for narrow-moat-rated Manawa Energy by 9% to NZD 144 million, in the middle of management’s recently upgraded guidance range of NZD 142 million-NZD 147 million. We also increase medium-term EBITDA forecasts by about 5% on average on persistently high wholesale electricity prices, while marginally reducing longer-term forecasts. We maintain our NZD 6.30 per share fair value estimate and consider the stock attractive at current prices. Investors are extrapolating current depressed earnings and risk missing the strong rebound that is likely in coming years as the firm’s average electricity sales price lifts.