Fisher & Paykel Healthcare tipped for rebound as analysts back ‘oversold’ stock before result – Stock Takes

“We do think there’s some sort of exposure to those issues, but it [FPH] is a quality compounder [a business that consistently increases its earnings and value over time].

“And we think demand remains very strong for their products, and they’ll be able to deliver a good set of numbers next week,” he told Stock Takes.

“The stock is also very cheap – cheaper than it’s been for some years – so hence we put it to an ‘overweight’ recommendation.

“It’s the lowest p/e [price to earnings] multiple it’s been on for a couple of years – 34 times 2027 on our numbers.

“It got up to 55 times 18 months ago and we’ve had a ‘neutral’ on it for valuation reasons for some years,” he said.

Ridgewell said FPH had a track record of growing revenue and earnings.

“It’s a world-class business with a long runway for growth and it doesn’t have the same issues that are afflicting its ASX peers.”

Ridgewell said the Iran war would have an impact on FPH’s fuel and plastics costs, but said they should be short-term issues.

“There are some challenges but still, the business is growing in the low double digits.”

FPH – the market’s biggest stock – had gone through a “wave of innovation” in the last few years, which Ridgewell expected to continue, particularly in the hospital segment.

He noted that FPH had upgraded its outlook twice already and that the company had a track record of meeting or beating guidances provided.

In February, FPH issued a 2026 revenue guidance of $2.17 billion to $2.27b and full-year net profit guidance of $410 million to $460m.

Craigs expects FPH to do better than that, with revenue of $2.315b and a net profit of $481m.

“We think the stock’s oversold and while it is a challenging business environment as we’re all aware, we also think they’re doing an exceptional job managing their business,” Ridgewell said.

“We think they’ve got levers they can pull to deliver still a good set of numbers.”

Ridgewell noted the selloff in the ASX’s Cochlear and CSL, but he did not think FPH should be de-rated to the same extent.

“We think the growth story for FPH remains intact.

“There’s going to be a little bit of turbulence, but it’s fundamentally intact.”

Craigs has a target price for FPH of $40.12.

Forsyth Barr said that while FPH is not fully immune from the flow-on impacts of the current oil price crisis, it saw these as relatively minor and more one-off in nature.

“FPH’s financial year 2027 outlook will be key for investors,” it said in a research note.

“Air freight rates have risen, but we believe these are offset by lower sea freight rates, and at current rates tariffs are unlikely to be a meaningful additional headwind in 2027.”

Infratil, which this week sold down its Contact Energy stake for $495m, is also due to report on Tuesday.

The company still has a 9.08% holding in Contact.

It said it planned to retain that stake until at least Contact’s 2026 full-year results announcement, expected on or around August 18.

Early this month, CDC Data Centres – half-owned by Infratil – said it had secured the largest data centre contract in Australia’s history, a 555-megawatt deal that takes its total contracted capacity to over one gigawatt.

Shares in Infratil (IFT) last traded at $15.74 – having gained 35% over the last 12 months.

“Following the size of CDC’s contract win in early May 2026, we believe that has bought Infratil some time before investors expect another win, but further quantitative updates on CDC’s customer negotiations would be welcome,” Forsyth Barr said.

“We expect a lot of investor attention at the result to focus on CDC, which is warranted given it is 50%-60% of IFT’s portfolio by value; however, it is important not to forget about the rest.”

Infratil also has a stake in US renewable energy firm Longroad.

“Longroad’s growth path is impressive, and we are looking for updates on the 1.5GW [gigawatts] of projects it will start constructing over the next 12 months,” the broker said.

Craigs Investment Partners has acquired Christchurch-based Hamilton Hindin Greene’s investment advisory business for an undisclosed sum.

The agreement brings together Hamilton Hindin Greene’s more than 125 years of trusted investment advice with Craigs’ depth, scale and expertise to form a compelling wealth management proposition for Canterbury, Craigs said.

Craigs CEO Simon Tong said acquisitions continue to be integral to Craigs’ growth strategy, helping the firm deliver quality client outcomes through scale and expansion of services.

In 2025, Craigs acquired Hawke’s Bay firm Somerset Smith Partners, and last month it announced the acquisition of Dunedin-based financial planning and wealth management firm phwealth.

In its analysis of Meridian’s monthly operating report, Morningstar said the company’s generation rose 14% in the 10 months to April 2026, compared with the same period last year, as heavier rainfall lifted hydroelectric production.

Retail electricity prices rose 6% and demand response payments fell 80%.

“Meridian’s strong performance continues,” it said.

“Earnings are tracking broadly in line with our expectations for ebitda [earnings before interest, tax, depreciation and amortisation] growth of about 70% in fiscal 2026.

“Normalisation of rainfall following last year’s drought boosts generation volumes and reduces the need for costly back-up power and demand response payments, leading to significant cost savings.”

Demand response payments are made to large firms to reduce electricity usage during shortages.

“From fiscal 2027 to 2030, we expect ebitda to slow to a still-respectable average of 8% per year, driven by moderate retail price uplifts and completion of developments.”

Morningstar maintained its fair value estimate of $6 per share for Meridian.

“The stock is fairly valued on a forward yield of 4%, mostly imputed for New Zealand residents, with solid growth underpinned by the positive long-term outlook for electricity demand,” Morningstar said.

“Meridian’s hydro assets are cheap to operate and highly flexible, providing structural advantages to other forms of power generation.”

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.