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Genesis Energy Ltd GNE

Morningstar Rating
NZD 2.19 −0.03 (1.13%)
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Company Report

Genesis Energy: Rainfall and Earnings Normalizing

Narrow-moat Genesis Energy had a stellar fiscal 2023 as its hydroelectric schemes benefited from heavy rainfall in the North Island. In the fiscal year to date, rainfall has been more modest, and we estimate earnings are tracking broadly in line with our prior expectations. We maintain our view that Genesis can achieve its EBITDA guidance of NZD 430 million for fiscal 2024 and NZD 500 million for 2025. We keep our NZD 2.70 per share fair value estimate and consider the stock slightly undervalued.

Price vs Fair Value

GNE is trading at a 486% premium.
Price
NZD 2.28
Fair Value
NZD 2.80
Uncertainty
High
1-Star Price
NZD 7.27
5-Star Price
NZD 9.43
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Persistently high wholesale electricity prices are flowing through to customer tariffs, supporting earnings growth.

Bears

The Kupe stake introduces oil price volatility. Earnings should benefit from recent strength in the oil price (with a lag because of hedging) but over the long term, earnings are at risk from depletion of the field.

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Trading Information

Previous Close Price
NZD 2.22
Day Range
NZD 2.172.22
52-Week Range
NZD 2.172.78
Bid/Ask
NZD 2.19 / NZD 2.21
Market Cap
NZD 2.35 Bil
Volume/Avg
518,638 / 318,329

Key Statistics

Price/Earnings (Normalized)
17.54
Price/Sales
0.93
Dividend Yield (Trailing)
6.91%
Dividend Yield (Forward)
6.91%
Total Yield
6.95%

Company Profile

Genesis Energy is one of New Zealand's leading producers of electricity, accounting for more than 15% of the country's total generation. The firm enjoys a strong retail presence, with the highest retail market share, at over 25%. The company has a mix of renewable and thermal assets, with the latter accounting for about 55%-60% of the firm's overall production. The company has a 46% interest in the Kupe oil and gas field.
Sector
Utilities
Industry
Utilities - Independent Power Producers
Stock Style Box
Mid Value
Total Number of Employees
1,204

Competitors

Valuation

Metric
GNE
MNW
MEL
Price/Earnings (Normalized)
17.5420.1653.21
Price/Book Value
0.981.112.72
Price/Sales
0.935.174.24
Price/Cash Flow
7.3314.1329.29
Price/Earnings
GNE
MNW
MEL

Financial Strength

Metric
GNE
MNW
MEL
Quick Ratio
0.600.370.67
Current Ratio
1.151.130.94
Interest Coverage
1.482.861.75
Quick Ratio
GNE
MNW
MEL

Profitability

Metric
GNE
MNW
MEL
Return on Assets (Normalized)
1.69%1.19%0.79%
Return on Equity (Normalized)
3.51%2.02%1.34%
Return on Invested Capital (Normalized)
2.27%2.56%1.00%
Return on Assets
GNE
MNW
MEL
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Capital Allocation
Economic Moat
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HUNGF
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CRPJY
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HGKGY
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HGKGF
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CPYYY
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CPYYF
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DIPGF
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