Meridian Energy Ltd

MEZ: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$1.50	Lknkst	Bvnnspjl

Meridian Energy: Lifting Our Valuation 15% on New Aluminum Smelter Contract

Adrian Atkins

May 31, 2024

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.

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