Morningstar hikes Mercury NZ's EBITDA view on deals, higher power prices

Mercury General

29/06/2022 06:39

** Morningstar raises medium-term EBITDA forecasts for
renewable electricity retailer Mercury NZ  MCY.NZ  by 10%-15%
due to its acquisition of Trustpower's  TPW.NZ  retail arm, Tilt
Renewable's NZ wind farms, and a positive outlook for prices
    ** Mercury bought Trustpower's business in June last year
for NZ$441 mln ($275.6 mln) and Tilt's operations in August 2021
for NZ$797 mln  urn:newsml:reuters.com:*:nL2N2O20H9
    ** Co cut its FY2022 core profit forecast in January, but
Morningstar says conditions are improving and wholesale
electricity prices remain high, a handy tailwind to earnings
    ** "Mercury is undergoing a growth spurt as it beds down
recent acquisitions ... Combined with a return to normal
rainfall, we forecast EBITDA to grow at 11% on average from
fiscal 2021 to 2026," brokerage says
    ** Two of four brokerages rate the stock "buy" or higher,
one "hold" and one "sell"; median PT A$6.71
    ** Up to Tuesday's close, stock down 5.2% this year

    ($1 = 1.6000 New Zealand dollars)

 (Reporting by Shashwat Awasthi)
 ((Shashwat.Awasthi@tr.com
mailto:Shashwat.Awasthi@thomsonreuters.com))