Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Fletcher stock upgraded by First NZ on NZ, Aust building

Fletcher stock upgraded by First NZ Capital on NZ, Australia building, cost cutting

Feb. 18 (BusinessDesk) – Fletcher Building, the biggest company on the NZX 50 Index, was upgraded by First NZ Capital because of a pickup in the building sector in Australia and New Zealand and the benefits of its cost cutting programme.

The brokerage lifted its price target to $10.25 from $9 and raised its rating to ‘neutral’ from ‘underperform’. Auckland-based Fletcher is scheduled to release its first-half results on Thursday and First NZ Capital is forecasting a 16 percent increase in earnings before interest and tax to $304 million.

“Our expectation is for a more positive trading outlook commentary since its AGM guidance four months ago,” analysts at the brokerage wrote in a report.

At the annual meeting last October, Fletcher chairman Ralph Waters said conditions in the Australian market were expected to remain flat, with some pickup in New South Wales, offset by subdued demand in Victoria and a decline in investment in the mining sector.

The First NZ Capital research says building approvals jumped 23 percent in the second half of 2013 and the recent acceleration in value of residential work approved “promises considerable pent-up growth in the next 12 months.” Non-residential approvals had also increased.

In New Zealand, a pickup in net migration would help underpin growth in new house and apartment building consents, with “some signs of activity spreading beyond Auckland and Christchurch.”

Infrastructure work is expected to pick up in late 2014 or early 2015 and there are expectations the Treasury’s estimated $40 billion cost to rebuild Christchurch will be exceeded, the brokerage said.

“It would not surprise us if the next estimate reaches $45 billion to $50 billion,” it said.

The shares rose 0.5 percent to $9.59 and have gained about 12 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Rocket Lab: Launch Expected

Rocket Lab has delayed the roll out of the launch vehicle called Electron by one day, due to weather conditions. The planned launch attempt will now take place on Tuesday, May 23, 2017. More>>

ALSO:

Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>

ALSO:

Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...
More>>

ALSO:

MPI: Myrtle Rust Appears In Taranaki

The nursery in Waitara (just north of New Plymouth) reported suspected myrtle rust symptoms on young plants to the Ministry’s 0800 number yesterday (Tuesday). More>>

ALSO: