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

Thematic (Sector/Industry)

New zealand Energy / Thematic (Sector/Industry)

<ul><li>The electricity sector appears to have defied gravity over the past two years, generally tracking sideways despite interest rates steadily rising with earnings growth the key factor, but does the growth justify the share price performance?</li><li>Our analysis suggests the risk of a negative share price reset is rising with a growing risk of earnings downgrades ~FY27 onwards and the return of a risk on environment favouring cyclical stocks over defensive yield stocks.</li><li>We maintain our sector underweight view. Our preferred sector picks, Contact Energy (CEN) and Genesis Energy (GNE) are NEUTRAL and we have UNDERPERFORM ratings on Mercury (MCY), Meridian Energy (MEL) and Manawa Energy (MNW).</li></ul>

The electricity sector appears to have defied gravity over the past two years, generally tracking sideways despite interest rates steadily rising with earnings growth the key factor, but does the growth justify the share price performance?Our analysis suggests the risk of a negative share price reset is rising with a growing risk of earnings downgrades ~FY27 onwards and the return of a risk on environment favouring cyclical stocks over defensive yield stocks.We maintain our sector underweight view. Our preferred sector picks, Contact Energy (CEN) and Genesis Energy (GNE) are NEUTRAL and we have UNDERPERFORM ratings on Mercury (MCY), Meridian Energy (MEL) and Manawa Energy (MNW).

Electricity Sector - Sector Set for an Electric Shock