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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news