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Contact Energy Limited
(CEN)
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Rating:63Neutral
Price Target:
$9.00
▲(0.45% Upside)
Action:N/A
Date:10/05/26
The score is supported primarily by improved profitability and recovering cash flow, reinforced by upbeat FY-27 guidance (EBITDAF and dividend growth) and secured synergy benefits. These positives are tempered by weak technical momentum (below major moving averages with negative MACD), moderate balance-sheet/cash-conversion risk, and valuation that is helped by the ~5.31% yield but constrained by a ~20.14 P/E.
Positive Factors
Improved earnings and cash generation
Strong EBITDAF and operating free cash flow growth indicates that Contact is converting its generation and retail platform into greater financial capacity. Improving cash conversion can support investment in new renewable assets, debt management and shareholder distributions over the next several quarters.
Negative Factors
Choppy revenue and margin performance
The decline in revenue and sharp gross-margin compression show that improved profit has not been matched by consistent top-line or gross-profit momentum. Exposure to pricing and input volatility could make earnings less predictable and limit the durability of recent profitability gains.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved earnings and cash generation
Strong EBITDAF and operating free cash flow growth indicates that Contact is converting its generation and retail platform into greater financial capacity. Improving cash conversion can support investment in new renewable assets, debt management and shareholder distributions over the next several quarters.
Read all positive factors
Contact Energy Limited (CEN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.15B
Dividend Yield5.31%
Average Volume (3M)1.07M
Price to Earnings (P/E)20.4
Beta (1Y)0.65
Revenue Growth-6.33%
EPS Growth-0.10%
CountryNZ
Employees1,421
SectorUtilities
Sector Strength65
IndustryRenewable Utilities
Share Statistics
EPS (TTM)0.42
Shares Outstanding1,081,034,900
10 Day Avg. Volume831,463
30 Day Avg. Volume1,070,527
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)1.82
Price to Sales (P/S)2.96
P/FCF Ratio32.31
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.88Price Target Upside54.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.42
Revenue Forecast (FY)$3.19B
Contact Energy Limited Business Overview & Revenue Model
Company Description
Headquartered in Wellington, New Zealand, Contact Energy Limited is a prominent energy provider that has been operating since its incorporation in 1995. The company specializes in the generation and sale of electricity and natural gas across the c...
How the Company Makes Money
Contact Energy primarily makes money by selling energy and energy-related services in New Zealand. Key revenue streams include: (1) Retail electricity sales: the company supplies electricity to households and businesses under retail contracts; rev...
Contact Energy Limited Earnings Call Summary
Earnings Call Date:Aug 09, 2026
(Q4-2026)
| Next Earnings Date:Feb 08, 2027
Earnings Call Sentiment Positive
The call emphasized strong operational delivery (notably renewable generation growth), material financial improvements (EBITDAF +31%, operating free cash flow +49%), and successful integration of the Manawa acquisition with secured synergies and improved balance sheet metrics. Key risks discussed include lower wholesale futures (near-term pricing headwinds), planned geothermal outages reducing near-term output, retail margin pressure and elevated integration/operating costs. Strategic optionality (11 TWh pipeline, data center partnership, long-term PPAs) and a clear Contact31 growth plan support confidence in future delivery, though several large opportunities remain conditional. On balance, positive operational and financial momentum outweigh the highlighted risks.Positive Updates
Strong Earnings and Cash Flow Growth
EBITDAF of $1.011 billion, up 31% year-on-year; underlying profit up 62% to $423 million; operating free cash flow increased 49% to $648 million; cash conversion improved from 55% to 64% of EBITDAF.
Negative Updates
Wholesale Price Headwinds and Futures Decline
Average contracted price moved down from ~$157/MWh to ~$140/MWh, creating a ~$53 million headwind; ASX futures have fallen nearly 30% since the start of the year, posing potential medium-term pressure on FY'28–FY'29 earnings.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Earnings and Cash Flow Growth
EBITDAF of $1.011 billion, up 31% year-on-year; underlying profit up 62% to $423 million; operating free cash flow increased 49% to $648 million; cash conversion improved from 55% to 64% of EBITDAF.
Read all positive updates
Company Guidance
Contact guided FY‑27 normalized EBITDAF of about $1.045 billion (≈$1.064bn before ~$19m of integration/platform items), expects a FY‑27 dividend of $0.42 per share (up ~5%) after declaring FY‑26 total dividends of $0.40 per share (final $0.24), and said ~97% of FY‑27 repricing is confirmed; retail net price is expected to modestly fall ~2% to $171/MWh, BAU OPEX is forecast at ~$360m (with ~ $7m remaining integration and ~$12m SaaS expensing), and the outlook already embeds $28m of secured Manawa run‑rate synergies plus ~$56m of repricing (≈$84m uplift for FY‑27). FY‑26 results that underpin the guidance included EBITDAF $1.011bn (up 31%), operating free cash flow $648m (up 49%) with cash conversion improving to 64% of EBITDAF, ROIC 7.5% (4‑yr avg 5.9%), net debt $2.2bn with S&P‑adjusted net debt/EBITDAF ~2.1x, average debt tenor 7.2 years and blended gross interest ~5.2%.Contact Energy Limited Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
58
Neutral
Cash Flow
64
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.21B | 3.41B | 2.84B | 2.10B | 2.37B |
| Gross Profit | 900.00M | 1.39B | 680.00M | 794.00M | 837.00M |
| EBITDA | 1.02B | 833.00M | 639.00M | 446.00M | 551.00M |
| Net Income | 423.00M | 331.00M | 235.00M | 127.00M | 182.00M |
Balance Sheet | |||||
| Total Assets | 10.66B | 6.81B | 6.21B | 5.81B | 5.17B |
| Cash, Cash Equivalents and Short-Term Investments | 766.00M | 514.00M | 229.00M | 140.00M | 168.00M |
| Total Debt | 3.05B | 2.45B | 1.91B | 1.56B | 1.10B |
| Total Liabilities | 5.43B | 4.05B | 3.59B | 3.00B | 2.33B |
| Stockholders Equity | 5.23B | 2.76B | 2.62B | 2.80B | 2.84B |
Cash Flow | |||||
| Free Cash Flow | 294.00M | 95.00M | -2.00M | -194.00M | 30.00M |
| Operating Cash Flow | 793.00M | 544.00M | 504.00M | 347.00M | 377.00M |
| Investing Cash Flow | -877.00M | -528.00M | -595.00M | -618.00M | -381.00M |
| Financing Cash Flow | 336.00M | 269.00M | 104.00M | 195.00M | -1.00M |
Contact Energy Limited Technical Analysis
Negative
8.96
Price Trends
8.75
Negative
8.94
Negative
8.98
Negative
Market Momentum
-0.06
Positive
43.52
Neutral
18.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NZ:CEN, the sentiment is Negative. The current price of 8.96 is above the 20-day moving average (MA) of 8.64, above the 50-day MA of 8.75, and below the 200-day MA of 8.98, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 43.52 is Neutral, neither overbought nor oversold. The STOCH value of 18.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NZ:CEN.
Contact Energy Limited Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $4.76B | 19.96 | 6.64% | 5.51% | 8.27% | 47.72% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $14.48B | 108.65 | 1.38% | 4.77% | -19.65% | ― | |
64 Neutral | $9.84B | 30.49 | 6.38% | 4.64% | -7.83% | 56250.00% | |
63 Neutral | $9.15B | 20.43 | 8.71% | 5.31% | -6.33% | -0.10% | |
57 Neutral | $3.26B | 31.67 | 2.78% | 6.98% | -24.15% | -49.61% | |
55 Neutral | $13.84B | 24.48 | 7.31% | 1.49% | -8.97% | ― |
* Utilities Sector Average
NZ:CEN
Contact Energy Limited
8.55
-0.13
-1.47%
NZ:IFT
Infratil Limited
13.82
1.53
12.42%
NZ:MEL
Meridian Energy Limited
5.41
-0.12
-2.17%
NZ:MCY
Mercury NZ
6.83
0.47
7.34%
NZ:VCT
Vector
4.78
0.11
2.44%
NZ:GNE
Genesis Energy Limited
2.46
0.23
10.46%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.