Analyst Note| Brian Han |
We lift our fair value estimate on Chorus by 3% to NZD 7.00, or AUD 6.50 at current exchange rates. The upgrade is not due to management’s updated fiscal 2022 EBITDA guidance to NZD 665 million to NZD 685 million--a NZD 25 million phantom upgrade reflecting one-offs (NZD 15 million) and field service revenue recognition changes (NZD 10 million). Rather, it reflects the better-than-expected underlying cost performance, especially in labour (down 3%) and network maintenance (down 18%). This led to a circa 2% increase in our EBITDA forecasts from fiscal 2023.