Analyst Note| Adrian Atkins |
Narrow-moat Genesis Energy had a solid September quarter. We leave our earnings forecasts unchanged, expecting fiscal 2022 EBITDA in the middle of the NZD 420 to 440 million guidance range, implying low-single-digit percent growth on last year. We maintain our NZD 2.50 fair value estimate and consider the stock to be materially overvalued. While Genesis offers an attractive forecast yield of 5.4%, the long-term outlook is depressed by depletion of the Kupe oil and gas field--which currently contributes a fourth of EBITDA, and closure of thermal power stations.