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Meridian Energy Limited
(MEL)
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Rating:64Neutral
Price Target:
$6.00
▲(14.29% Upside)
Action:N/A
Date:10/05/26
The score is driven primarily by a financially resilient profile (low leverage) and a strong FY26 cash-flow/EBITDAF recovery supported by constructive FY27 guidance and a higher dividend. These positives are tempered by uneven profitability and top-line softness, neutral technical momentum, and a notably expensive headline valuation (very high P/E) despite the attractive yield.
Positive Factors
Conservative leverage
Meridian’s low, stable debt-to-equity provides a substantial capital buffer for a utility with ongoing generation investment needs. Conservative leverage should support funding flexibility and resilience through market volatility, even as development spending increases.
Negative Factors
Revenue and profitability volatility
Top-line contraction and uneven profitability weaken confidence in the durability of earnings, despite the FY26 recovery. The return to only modest net margin after a prior-year loss suggests Meridian remains exposed to changing market conditions and inconsistent earnings quality.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative leverage
Meridian’s low, stable debt-to-equity provides a substantial capital buffer for a utility with ongoing generation investment needs. Conservative leverage should support funding flexibility and resilience through market volatility, even as development spending increases.
Read all positive factors
Meridian Energy Limited (MEL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.48B
Dividend Yield4.77%
Average Volume (3M)2.06M
Price to Earnings (P/E)108.7
Beta (1Y)0.70
Revenue Growth-19.65%
EPS GrowthN/A
CountryNZ
Employees935
SectorUtilities
Sector Strength65
IndustryRenewable Utilities
Share Statistics
EPS (TTM)0.05
Shares Outstanding2,657,790,500
10 Day Avg. Volume1,537,147
30 Day Avg. Volume2,059,082
Financial Highlights & Ratios
PEG Ratio-0.91
Price to Book (P/B)1.54
Price to Sales (P/S)3.98
P/FCF Ratio27.18
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.23
Revenue Forecast (FY)$3.96B
Meridian Energy Limited Business Overview & Revenue Model
Company Description
Meridian Energy Limited engages in the generation and retailing of electricity to residential, business, and industrial customers in New Zealand, Australia, and the United Kingdom. The company generates electricity through 7 hydro stations; 8 wind...
How the Company Makes Money
Meridian primarily makes money by selling electricity generated from its renewable generation portfolio and by retailing electricity to end customers. Key revenue streams include: (1) Retail electricity sales: Meridian earns revenue by supplying e...
Meridian Energy Limited Earnings Call Summary
Earnings Call Date:Aug 25, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Mar 02, 2027
Earnings Call Sentiment Positive
The call conveyed a strong operational and financial recovery with record EBITDAF and cash flows, materially increased hydro storage and generation capability, meaningful retail growth, and positive system benefits from the Ruakaka battery. Management provided first‑time FY27 EBITDAF guidance and raised the dividend, signaling confidence. Challenges remain — notably contractor safety, customer migration frictions, rising OpEx/maintenance and regulatory headwinds — and near‑term leverage will rise as development spending increases. Overall the positives (robust earnings, storage expansion, development optionality and system benefits) substantially outweigh the manageable lowlights.Positive Updates
Record financial recovery and cash flow
Operating cash flows of $810M, up $492M versus FY25 (≈253% of the prior year increase) and 21% higher than FY24; EBITDAF $1.05B, up $440M on FY25 and 16% higher than FY24. Non‑GAAP underlying NPAT up $252M.
Negative Updates
Retail volatility and customer experience issues
Retail recorded an EBITDAF loss in the prior year; Kraken migration caused customer frustrations (Powershop experience issues) and some remaining issues are still being resolved despite >50% migration progress.
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Q4-2026 Updates
Positive
Negative
Record financial recovery and cash flow
Operating cash flows of $810M, up $492M versus FY25 (≈253% of the prior year increase) and 21% higher than FY24; EBITDAF $1.05B, up $440M on FY25 and 16% higher than FY24. Non‑GAAP underlying NPAT up $252M.
Read all positive updates
Company Guidance
Meridian guided FY27 EBITDAF of $1.04–$1.12 billion (P50 ~$1.08bn), operating costs of $321–$326 million (up ~2.5–4%), and capital expenditure of $370–$410 million, with a DigiGEN FY27 target of $6 million of value (>$1m delivered in FY26) and caveats around normal hydrology; the Board expects net debt to peak just over 3.0x before returning to a 2–3x range by ~FY31 and notes $1 billion of undrawn committed facilities. For context FY26 delivered operating cash flow $810m (up $492m vs FY25, +21% vs FY24), EBITDAF $1.05bn (up $440m vs FY25, +16% vs FY24), operating expenses $313m (+8%), CapEx $261m (+35%), conversion of 93% of EBITDAF to pretax & interest cash flows, net debt ~ $1.7bn (+11%) with spot net debt/EBITDAF 1.6x (down from 2.5x), and the Board increased dividends (final $0.161/share, +8.4%; full-year $0.225/share, +7.1%, DRP discount 0%, imputation 90%).Meridian Energy Limited Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.85B | 4.79B | 4.83B | 3.20B | 3.78B |
| Gross Profit | 976.00M | 4.79B | 729.00M | 642.00M | 394.00M |
| EBITDA | 1.34B | -89.00M | 996.00M | 474.00M | 990.00M |
| Net Income | 130.00M | -452.00M | 429.00M | 95.00M | 451.00M |
Balance Sheet | |||||
| Total Assets | 17.14B | 14.97B | 13.54B | 10.02B | 9.37B |
| Cash, Cash Equivalents and Short-Term Investments | 512.00M | 123.00M | 221.00M | 212.00M | 363.00M |
| Total Debt | 2.04B | 1.57B | 1.38B | 1.26B | 1.20B |
| Total Liabilities | 7.18B | 6.05B | 5.30B | 4.04B | 3.85B |
| Stockholders Equity | 9.96B | 8.92B | 8.25B | 5.99B | 5.52B |
Cash Flow | |||||
| Free Cash Flow | 564.00M | 134.00M | 346.00M | 180.00M | 289.00M |
| Operating Cash Flow | 810.00M | 318.00M | 667.00M | 509.00M | 461.00M |
| Investing Cash Flow | -449.00M | -191.00M | -327.00M | -327.00M | 598.00M |
| Financing Cash Flow | 28.00M | -225.00M | -331.00M | -333.00M | -844.00M |
Meridian Energy Limited Technical Analysis
Neutral
5.25
Price Trends
5.41
Positive
5.50
Negative
5.44
Positive
Market Momentum
0.03
Positive
50.87
Neutral
38.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NZ:MEL, the sentiment is Neutral. The current price of 5.25 is below the 20-day moving average (MA) of 5.42, below the 50-day MA of 5.41, and below the 200-day MA of 5.44, indicating a bullish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 50.87 is Neutral, neither overbought nor oversold. The STOCH value of 38.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NZ:MEL.
Meridian 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% | 7.08% | -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:MEL
Meridian Energy Limited
5.36
-0.20
-3.58%
NZ:CEN
Contact Energy Limited
8.53
-0.15
-1.71%
NZ:IFT
Infratil Limited
13.92
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12.34%
NZ:MCY
Mercury NZ
6.85
0.42
6.53%
NZ:VCT
Vector
4.72
0.06
1.37%
NZ:GNE
Genesis Energy Limited
2.47
0.29
13.20%
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.