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

Equity Bottom-Up

<h2><a target="_blank">Transport Trends</a></h2>
Growth Inflection Point
The demand picture for freight and passenger services has stabilised following several quarters of successive slowing. Economic stimulus, both domestically and offshore, will be supportive to a moderately better volume backdrop through 2020, in our opinion. While current volumes are broadly flat year on year across different modes, price growth generally remains robust. The earnings growth outlook among listed players is mixed and will be partially held back by the slower start to FY20. Valuations remain elevated and continue to discount higher growth rates than are currently being generated. We retain a neutral to negative stance on the sector. Our favoured stocks are NEUTRAL rated Mainfreight (MFT) and Freightways (FRE).
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Key transport trends and themes
Key themes across airports and airlines, roads and rail, and ports and shipping identified in Transport Trends include:
<ul>
<li>Log price recovery: Having fallen materially mid-year, export log prices have rebounded. This will help mitigate the negative impact on export volumes, which have slowed in recent months.</li>
<li>Traffic data stabilising: NZTA heavy vehicle data suggests domestic conditions have stabilised after a sustained downturn through 2019. The data is consistent with anecdotal industry feedback.</li>
<li>Aviation growth by the decade: The 2010s have bucked the long term international aviation growth deceleration trend with growth in excess of the 2000s. The 2020s is likely to revert to trend.&nbsp;</li>
</ul>
<div class="content-highlight">
Sector preferences
We summarise our sector stock ratings as follows:
<ul>
<li>OUTPERFORM: n/a</li>
<li>NEUTRAL: Air New Zealand, Freightways, Mainfreight, Napier Port</li>
<li>UNDERPERFORM: Auckland Airport, Port of Tauranga</li>
</ul>
</div>
Andy Bowley andy.bowley@forsythbarr.co.nz +64 4 495 8246

Transport Trends
Growth Inflection Point
The demand picture for freight and passenger services has stabilised following several quarters of successive slowing. Economic stimulus, both domestically and offshore, will be supportive to a moderately better volume backdrop through 2020, in our opinion. While current volumes are broadly flat year on year across different modes, price growth generally remains robust. The earnings growth outlook among listed players is mixed and will be partially held back by the slower start to FY20. Valuations remain elevated and continue to discount higher growth rates than are currently being generated. We retain a neutral to negative stance on the sector. Our favoured stocks are NEUTRAL rated Mainfreight (MFT) and Freightways (FRE).

Key transport trends and themes
Key themes across airports and airlines, roads and rail, and ports and shipping identified in Transport Trends include:

Log price recovery: Having fallen materially mid-year, export log prices have rebounded. This will help mitigate the negative impact on export volumes, which have slowed in recent months.
Traffic data stabilising: NZTA heavy vehicle data suggests domestic conditions have stabilised after a sustained downturn through 2019. The data is consistent with anecdotal industry feedback.
Aviation growth by the decade: The 2010s have bucked the long term international aviation growth deceleration trend with growth in excess of the 2000s. The 2020s is likely to revert to trend.&nbsp;


Sector preferences
We summarise our sector stock ratings as follows:

OUTPERFORM: n/a
NEUTRAL: Air New Zealand, Freightways, Mainfreight, Napier Port
UNDERPERFORM: Auckland Airport, Port of Tauranga


Andy Bowley andy.bowley@forsythbarr.co.nz +64 4 495 8246

Transport Trends: Growth Inflection Point

Mainfreight Ltd

Transport Trends: Growth Inflection Point