Meridian Energy Ltd
MEZ: XASX (AUS)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$5.60 | Pjwjz | Rrkdvfzl |
Meridian Energy: Lifting Our Valuation 15% on New Aluminum Smelter Contract
We increase our fair value estimate for narrow-moat-rated Meridian Energy by 15% to NZD 5.50 per share, after the group signed a new 20-year agreement to supply electricity to New Zealand Aluminium Smelters. We had expected the smelter to stay beyond the end of the current contract, which ends in December 2024. But the new contract is significantly better than we had expected in terms of price, tenure, and flexibility. At current prices, the stock remains overvalued.