FONTERRA SHAREHOLDERS FUND (FSF)
Share Price Analysis and Chart

04/10/2024

1

Outperform

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Macquarie observes Fonterra Shareholders Fund has restated the commitment on foodservice and ingredients channels with around 5% growth per annum in volumes to FY27.

Management also raised the return on capital aim to 10%-12% for FY24 to FY30 from 9%-10%. The analyst interprets this as an indication of more "sustainable earnings" from the 8.6% average from FY18-FY23.

The fund has raised the payout ratio to 60%-80% from 40%-60% due to the more robust balance sheet. Divestment of the consumer business in part or full was also flagged.

Outperform rating with a NZ$5.74 target price.

FORECAST
Macquarie forecasts a full year FY25 dividend of 34.46 cents and EPS of 48.62 cents.
Macquarie forecasts a full year FY26 dividend of 34.46 cents and EPS of 45.12 cents.

01/10/2024

2

Overweight

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FY24 results for Fonterra Shareholders Fund were stronger-than-expected by Jarden and included lower adjusted net debt than anticipated.

The upgrade cycle continues, with management's FY25 40-60c EPS guidance range sitting above the analysts' prior 46.4c forecast, which has now increased to 53c.

Jarden expects FY25 EBIT broadly in line with the FY30 target management set three years ago at around $1.4bn.

The Overweight rating is unchanged. The broker's target rises to NZ$4.57 from NZ$4.05 on the outlook for lower debt/higher base earnings.

FORECAST
Jarden forecasts a full year FY25 dividend of 34.37 cents and EPS of 49.08 cents.
Jarden forecasts a full year FY26 dividend of 33.82 cents and EPS of 48.34 cents.