Analysts said the latest round of earnings reports for New Zealand's listed companies was fairly strong although the mixed outlook is capping a lot of the upside for share prices, in particular given how high valuations are already running.
"Market multiples have been very extended and really required something of a flawless earnings season and that has not been the case in New Zealand or Australia," said Matt Goodson, managing director at Salt Funds Management.
Port of Tauranga, for example, posted a 7.9 percent gain in annual profit to $83.4 million, at the top of its guidance, in a year when total trade rose 10 percent to a record 22.2 million tonnes. However, it is already trading at 36 times consensus 2018 earnings, meaning any upside is pretty much baked in.
In terms of any outlook and guidance most companies say "the general growth outlook is okay, but that's about it.... there's continuing growth but nothing special," said Goodson.
Any forward looking comments were "very defensive and there was not a lot of vision as to how things are going to play out," said Brad Gordon, investment adviser for Hobson Wealth Partners. "While some of the upfront results were okay, the outlook disappointed."
The muted outlook meant several companies, like Trade Me, New Zealand's largest online auction site, came under pressure after posting a 26 percent jump in annual profit but saying it expects similar revenue growth in the current financial year and warning a soft property listing market means there is some downside risk.
Sky Network Television reported a 21 percent slump in annual profit and similar to Trade Me "management teams may not have provided the confidence that they are on top of things," said Shane Solly, a director at Harbour Asset Management.
Metro Performance Glass shares were also punished - not for its weak result - but because it expects its first half results to be largely flat despite the contribution from recently acquired Australian Glass Group.
Chorus is another company that lifted annual profit by 24 percent but is seeing its share price hover around five-month lows, hurt by the network operator's cloudier outlook.
In the other direction, beleaguered construction company Fletcher Building is paring some of the losses it has seen over recent months, despite 23 percent drop in full-year operating earnings. Solly said investors may be cheered by the fact that the "management team has done a good job talking about what they are doing and how they are doing it."
Fletcher Building shares were smashed earlier this year after the company slashed its earnings guidance and fired the chief executive.
Hobson's Gordon noted, however, some of the buying is coming from offshore investors who are "buying into the theme" of New Zealand strong construction sector at a more macro level.
One stand-out continued to be A2 Milk, which tripled its annual profit and said it would use some of its accumulated cash to buy back shares and may pay a special dividend. "That stock just keeps going up," said Gordon.
While the stock last traded at $5.57 and is up 162 percent so far this year, analysts say it has further to run despite the already high multiples First NZ Capital lifted its 12-month target price to $6.01 from $4.88 or 23 percent while Deutsche Bank lifted it to $5.80 from $5.00 or 16 percent in the wake of the result.
Another sector that is helping underpin value in the New Zealand market is the gentailers such as Genesis Energy and Mercury, which produced slightly better than expected results. They make up make up a significant portion of the market and the fact they posted "quite solid" earnings numbers is "helpful in a market that's fully priced," said Harbour Asset's Solly.
Salt's Goodson said, however, given their valuations, the results are enough to support their current share price but "may not be enough to see more expansion in a market trading at record high multiples."
Goodson noted the New Zealand market has gained every month this year. The benchmark S&P/NZX 50 Index is up 12.5 percent so far this year.
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