GENESIS ENERGY LIMITED (GNE)
Share Price Analysis and Chart

04/06/2024

3

Hold

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In a positive for NZ utilities, Rio Tinto ((RIO)) has agreed to electricity supply contracts to operate New Zealand Aluminium Smelters until 2044.

Weak aluminium prices nearly closed the smelter in 2020, Ord Minnett notes, which would have slashed wholesale electricity prices.

While Genesis Energy has no direct exposure, risk is reduced for the whole sector, the broker notes, with the smelter's commitment to operate for another 20 years.

Hold and NZ$2.30 target retained.

FORECAST
Ord Minnett forecasts a full year FY25 dividend of 11.94 cents and EPS of 7.17 cents.

21/11/2024

1

Buy

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Jarden maintains a Buy rating for Genesis Energy and raises the target price to NZ$3.15 from NZ$3.00, citing management’s strategy to monetise assets and achieve 95% renewable generation by 2035.

The 8 by 2028 strategy is projected to add NZ$90m to earnings (EBITDA) by FY28, with operating earnings (EBITDA) expected to reach NZ$550m, notes the broker.

The strategy includes optimising thermal capacity, leveraging hydro and retail assets, and exploring renewable growth opportunities, explain the analysts.

EPS estimates are revised downward for FY25-27 due to lower thermal contributions and ongoing regulatory risks, but cashflow improvements are expected to support dividends, highlights the broker, with a potential NZ32.7c payout by FY28.

Jarden highlights the competitive value of Genesis’ hydro assets and anticipates growing investor confidence as the company transitions to renewable integration and cost-effective energy solutions.

FORECAST
Jarden forecasts a full year FY25 dividend of 13.23 cents and EPS of 7.07 cents.
Jarden forecasts a full year FY26 dividend of 13.69 cents and EPS of 11.02 cents.