Port of Tauranga Limited (NZX: POT)

Port of Tauranga Limited (NZX: POT) is a New Zealand-based company which carries out business via the provision of wharf facilities, land, and buildings, for the storage and transit of import and export cargo, berthage, cranes, tugs, and pilot services for customers.

Recommendation Rationale – Sell at NZD 5.92 

• The company released financial results for the year ended 30 June 2024. Amid significant domestic and international supply chain challenges, the total cargo volumes for the year fell 4.2% to 23.6 Mn tonnes. The container volumes for the year decreased 2.5% to 1,147,350 TEUs.
• As per POT, current economic conditions and operating environment continued to be complex and challenging.
• POT’s revenue decreased 0.8% to $417.4 Mn. EBITDA (earnings before interest, tax, depreciation, and amortisation) decreased 7.0% to $203.7 million. Operating costs rose 3.8% to $218.6 million.

POT’s Daily Price Chart

POT Daily Technical Chart, Data Source: REFINITIV

Fundamental Valuation

POT is exposed to the risks related to higher inflation, slowdown in the industry, global economic downturn, etc. Therefore, POT is expected to trade at slight discount considering the risks associated.

Given its current trading levels, and risks associated, it is prudent to book profit at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of NZD 5.92 per share, down by 0.84% as on 24 October 2024

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 24 October 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest. 

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.