StockTalk

:)

:o)

Trading at a FY23 pe of 18.  Looks like the good times are continuing.

In the past 16 weeks from April 1, group revenue was up by 32.5% to $1.4 billion and profit up 82.9% to $178.83 million which Braid described sarcastically as "doing okay," to laughing shareholders.

Numbers were driven by an increase in US revenue by 41.4% to US$257.5m (NZ$410.6m) and a profit of  In the past 16 weeks from April 1, group revenue was up by 32.5% to $1.4 billion and profit up 82.9% to $178.83 million

Amazing company with a fabulous team culture approach....

The year to March 2022 produced the continuation of 12 years of record results, with a stunning after tax profit of $355.4 million dollars, an increase of 90% on the previous year.

We have a level of satisfaction in the major continents in which we operate, including China and South East Asia. We are able to take advantage of our global network of over 300 branches to grow and give high quality supply chain services to much of the world.

Our culture continues to define us in many areas such as payment of creditors on time every time, internal promotion and minimal use of casual labour, so that all team members can see themselves as being on a career path, the payment of an annual discretionary bonus, healthy meals, the payment of company tax in the countries in which we operate, and widespread belief that we as individuals and as a company are helping to make a better world.

Pie funds added to growth 2 fund.(Insert from todays newsletter)

We added Mainfreight during the month, expecting a strong AGM update and they delivered, although we are mindful that peak weekly profitability has probably passed

They were truly amazing numbers Mainfreight put up around how things were going this financial year

Share price today not much higher than it was the day of that announcement .... and it's even lower than what it was when they announced the F22 result in May

And you can't say its outrageously over priced either ----PE under 20

A few months before we hear much more from them .... and share price will probably just hang around current levels

Added to my position yesterday. Not long for update

Great update. Growth slowed since last update but pretty good. Have been accumulating and have a good position that I will hold long term.

https://www.nzx.com/announcements/400953

Quote from: Shareguy on Oct 21, 2022, 09:53 AMGreat update. Growth slowed since last update but pretty good. Have been accumulating and have a good position that I will hold long term.

https://www.nzx.com/announcements/400953

some might say profit growth has halved over last 10 weeks (compared to first 16 weeks)

No worries though

Only wish share price would go up 44%

Well run company still in a conformed downtrend despite today's update.

I've put this on my watch list.  When TA says buy I'm favorably inclined to do so but I am disinclined towards doing anything until a new uptrend is confirmed.

From yesterda'ys update rolling 12 months eps is $4.38 so trading at a PE of 15

I think full year eps will come in at $4.72

Table of half yearly npat and profit growth below. Impressive and my forecast doesn't look outrageous

0000mft.JPG

PE looks cheap but what's E in FY24 or FY25 when freight rates normalise ?

Quote from: Basil on Oct 22, 2022, 09:30 AMPE looks cheap but what's E in FY24 or FY25 when freight rates normalise ?

Probably the E in F25 will be about the same as now

Ooops - no growth maybe

So do we have this thing called 'peak profit'? Market's don't like that .... where to next then

Quote from: winner (n) on Oct 22, 2022, 09:38 AMProbably the E in F25 will be about the same as now

Ooops - no growth maybe

So do we have this thing called 'peak profit'? Market's don't like that .... where to next then

That's why I am following the chart and waiting for a new confirmed uptrend.  I don't think anyone has a clue what E is in FY25.

Quote from: Basil on Oct 22, 2022, 09:45 AMThat's why I am following the chart and waiting for a new confirmed uptrend.  I don't think anyone has a clue what E is in FY25.

Talking of peaks isn't the chart really beautiful .... if you think it looks like Mount Ngāuruhoe

And 'target' maybe $52

000000mft.JPG

Quote from: winner (n) on Oct 22, 2022, 09:53 AMTalking of peaks isn't the chart really beautiful .... if you think it looks like Mount Ngāuruhoe

And 'target' maybe $52

000000mft.JPG

WOW, it does !  Pretty good ski slope on that right hand side with the clear potential for it to go on quite a bit longer !

FY22 results show 'Air and Ocean' volumes up about 20% but revenues up about 84% and profit up 214%. Same sort if picture for 'Transport'

Obviously the huge increase in revenues is the impact of all the global supply chain issues we've heard about — leading to higher freight rates

I assume costs have increased as well - by not as much as revenues — so higher profits.

Is it the sustainability of the the current high freight rates (like Transport rates per tonne were 25% higher in F22 than F21) that worries investors and the possibility of falling profits.

Confession ...never really studied the detail of these companies ....just the big numbers and not the key drivers of how they occur.

I think there is warranted concern over freight rates normalising, but what if this is the new normal?

The growth in revenue is it sustainable ? I think so, with new branches opening up the opportunities are enormous.  Very low debt and a very well company.

I have always thought was trading on high fundamentals so have only been buying recently. To me for a high quality proven performer the fundamentals currently look very attractive.

It nearly cracked the $100 and I don't think we will have long to wait, once the general market improves.

Quote from: Shareguy on Oct 23, 2022, 09:46 AMI think there is warranted concern over freight rates normalising, but what if this is the new normal?

The growth in revenue is it sustainable ? I think so, with new branches opening up the opportunities are enormous.  Very low debt and a very well company.

I have always thought was trading on high fundamentals so have only been buying recently. To me for a high quality proven performer the fundamentals currently look very attractive.

It nearly cracked the $100 and I don't think we will have long to wait, once the general market improves.

So in simple terms mft profit = Activity (freight/storage) X Rates less costs

Looking forward -

Activity likely to increase TICK

Rates ..... some doubt whether the significant increase in rates can hold QUESTION MARK

Costs ..... many are variable and they've proved they can keep costs under control. TICK

suppose 2 TICKS less 1 QUESTION MARK means increased profits likely in years ahead?

If shit hits fan not paying the $100m staff bonus will help the bottom line.

Cool they give as much to staff by way of bonuses as they give shareholders by way of dividends

A great example if a company looks after all stakeholders it will be prosper in the long term ......shareholders aren't the only stakeholder.

Quote from: Basil on Oct 22, 2022, 09:30 AMPE looks cheap but what's E in FY24 or FY25 when freight rates normalise ?

Pretty sure cost will normalise as well when freight rates drop. They just will keep clipping the ticket, though demand (and with that margins) will rise during the next boom phase. No change for them other that they managed to solidify and grow their base with some great investments ... during the bad times.

Jamie Dimon opined recently he was pretty sure we're going into a global recession in 2023. He also cautioned we've never had QT before (quantitative tightening), and the war could drag on for years...  I'm pretty sure these things will materially affect freight rates and volumes world-wide going forward which are still at highly elevated levels because as he mentioned, at this point the average consumers balance sheet is still in good shape.
The beauty of TA is you can simply pace yourself and let the market tell you when the time is right, provided you believe its a good fit for your portfolio, and I am not so sure it is for mine ?

I am not so sure with the ESG side of things the culture is a good fit for me.  If they're paying staff, who are probably already paid very well in a tight and highly competitive market for skilled staff, more than shareholders in dividends it kind of shines a spotlight on what their real purpose is ?  Who really owns the company, the staff or the shareholders ?   If it's the shareholders why are the staff being paid a bonus higher than the dividends?

I have long suspected that some people, (often more prevalent as leaders get towards the end of their working lives) who become extremely wealthy find it too easy to throw other shareholders money around in a quasi-philanthropic or outright benevolent way when they don't need it themselves.  Remind me again what the yield is ?  Ouch...off direct broking, even after the recent huge correction in the share price, only 2.09%

Hmmm...is this company really going to make my semi-retired life more comfortable?  (I fully realise younger investors are probably chasing growth and that's fine but growth and a decent dividend yield are not necessarily mutually exclusive items). 

Horses for courses, I don't think this is for me and regardless of that and their plans for growth which are impressive, in my view strong headwinds going forward are readily apparent and I expect the ski slope downwards to continue in the near term..

Fbar says It's dangerous to underestimate Mainfreight (MFT); we've been guilty of doing this at times historically and we were again last week.

FY23 forecast

$4.34 EPS (normalised)
$1.74 DPS
15.6 PE

OUTPERFORM AT $84

There is certainly big headwinds, but Great opportunity in my view for a quality proven performer with huge growth potential. It's a bottom draw share for me.

Don and Bruce making large purchases today. Good rise in SP.

Jarden upgraded their earnings forecasts 14-21%
driven by broad based strength across all geographies and
products + higher margin expectations
Their target price NZ$90.00 (from $85.00). Rating
retained at Overweight.

Quote from: Basil on Oct 23, 2022, 11:40 AMI am not so sure with the ESG side of things the culture is a good fit for me.  If they're paying staff, who are probably already paid very well in a tight and highly competitive market for skilled staff, more than shareholders in dividends it kind of shines a spotlight on what their real purpose is ?  Who really owns the company, the staff or the shareholders ?   If it's the shareholders why are the staff being paid a bonus higher than the dividends?

I have long suspected that some people, (often more prevalent as leaders get towards the end of their working lives) who become extremely wealthy find it too easy to throw other shareholders money around in a quasi-philanthropic or outright benevolent way when they don't need it themselves.  Remind me again what the yield is ?  Ouch...off direct broking, even after the recent huge correction in the share price, only 2.09%

Who really owns the company, the staff or the shareholders ?   If it's the shareholders why are the staff being paid a bonus higher than the dividends?

Great post, the law of diminishing returns certainly applies to paying staff cash. The 100 Year plan needs to get the balance right.

A share programme for staff, with higher yielding shares, is arguably is much better aligned strategy long term.

Craig's lowered tp to $77 outperform. Met guidance.

Average of the 3 is $83.67

Is it time for Mainfreight to consider a stock split. A 10 for 1 stock split would put thier share more in line with our market.

Thoughts?

https://investinganswers.com/articles/how-benefit-stock-split

Mainfreight share price only high cause they a great company.

They should be extremely proud of their high share price ...... let them take the kudos for it

It possibly gives more credibility where it matters (money markets)

An Aussie paper would not have suggested Mainfreight NZ greatest company if its share price was $7

Let them keep the bragging rights ....no share split ...it'll only cheapen them

Most of the reasons for share splits in that article are unsubstantiated .... Just a good story imo

Dark clouds coming

https://edition.cnn.com/2022/11/02/business/maersk-ceo-recession/index.html

Now one of my largest holdings. Thursdays half year result will be stella, as flagged. Will be looking closely at US growth.

Quote from: Shareguy on Nov 03, 2022, 03:18 PMDark clouds coming

https://edition.cnn.com/2022/11/02/business/maersk-ceo-recession/index.html

There hasn't been much/any drop in pricing out of NZ that I've seen, at least for reefers. East/West trade lanes I understand are down to pre-Covid pricing. But north-south still expensive.

In our business, we've got a container going to Long Beach shortly, and is over $13k NZD for seafreight. I happened across the freight invoice for a shipment in 2018, and was about $4.5k NZD (albeit charged in USD and FX impacts).

Outstanding

Outlook
We are satisfied with this financial performance for the first six months of our financial year.

Trading post half-year, through the five weeks of October and into November, has seen revenue levels increase by 2% over the prior year and profit before tax up 11%.

We continue to be confident of trading conditions for the remainder of the financial year, albeit cognisant of economic headwinds and declining sea freight rates and volumes leading into the New Year. We remain focused on increased growth, with all divisions continuing to see new customer opportunities.

Accordingly, we continue to invest in our network infrastructure for the long term across all regions

Still track for FY $480m or >$4.75 EPS

Might need to increase my expectations / forecast though

Yes Winner I agree it's a great result


Revenue $3 billion Up $729 million or 32%
Profit before tax $301.71 million Up $120 million or 66%
Net profit $217.02 million Up $ 86 million or 66%

Fbar had $205 m net profit.

At market close yesterday SP$73.35 and winners EPS of $4.75 FY23 is a PE of 15.4

At $100 a share is still only a PE of 21

Adjusted for foreign exchange impact, Group Revenue is up 26.3%, Profit before tax is 57.8%, and Net profit is 57.7%.
• An interim dividend of 85.0 cents per share has been set by the Board of Directors, payable on 16 December 2022; an increase of 54.5%.

NPBT Trend F23

1st 16 weeks  +86% v pcp
Next 10 weeks +43% v pcp
Next 5 weeks  +11% v pcp

Is there a trend showing up here?

Wonder what they'll say about the 12 weeks to end of January --- they say we are all interested so will announce something begnning of February

Quote from: winner (n) on Nov 10, 2022, 02:20 PMNPBT Trend F23

1st 16 weeks  +86% v pcp
Next 10 weeks +43% v pcp
Next 5 weeks  +11% v pcp

Is there a trend showing up here?

Wonder what they'll say about the 12 weeks to end of January --- they say we are all interested so will announce something begnning of February

Great company no question and fabulous result but yes I think the outlook commentary was quite cautious and the market clearly thinks that is the start of a new trend.

Quote from: Basil on Nov 10, 2022, 03:54 PMGreat company no question and fabulous result but yes I think the outlook commentary was quite cautious and the market clearly thinks that is the start of a new trend.

Yes caution warranted. Result was excellent but was expected after announcing beforehand a investor update. Don Braid has a history of exceeding expectations. Glad to have this company in my portfolio.

Quote from: Shareguy on Nov 10, 2022, 04:02 PMYes caution warranted. Result was excellent but was expected after announcing beforehand a investor update. Don Braid has a history of exceeding expectations. Glad to have this company in my portfolio.

Fabulous leadership with this company, no question about that!

Well said Don

Responding to recent political criticism of companies making outsized profits following the Covid-19 pandemic, managing director Don Braid said 75% of Mainfreight's result was earned offshore.

"We're attempting to grow our business globally and we bring those profits back to New Zealand, which the Government has a nice feed on through tax anyway.

"Frankly, I think the Government would be better to focus on the other troubles the economy has got, that they can control, and let businesses get on and do what they do."

Hey shareguy - seeing you liked the KMD TSR chart I did one for MFT

EX Morningstar info - shareholder returns include dividends reinvested

Pretty cool eh

0000mft.JPG

Craigs latest

Overweight rating retained
Since the investor day MFT's share price has gained 9%, and is now trading closer to peer PE multiples. We have slightly increased our Price Target to reflect forecast changes made today, but note our forecasts remain well below consensus. We retain an Overweight rating on value grounds (particularly the long-term outlook), but we do have some concern around sentiment given the impact of short-term headwinds.

Fbar latest


We lift our target price to NZ$87 from NZ$84 to reflect our medium term earnings revisions as outlined below and the further lift in peer company multiples. 

Price Target $81.10 (prev $77.00)

Testing 52 Week low. Tempting as it is to add. Confirmed downtrend and some big headwinds. Will watch and wait.

Every dark cloud has a sliver lining. May be in 2024 or 2025.

Quote from: Mr Cashflow on Jan 15, 2023, 07:34 PMEvery dark cloud has a sliver lining. May be in 2024 or 2025.

Climate change has put paid to that saying about every dark cloud has a silver lining

What's happened to investor update stated on their website to be released 2 Feb 2023

Quote from: Shareguy on Feb 03, 2023, 09:05 AMWhat's happened to investor update stated on their website to be released 2 Feb 2023

Held up because of the floods I reckon

Quote from: Shareguy on Feb 03, 2023, 09:05 AMWhat's happened to investor update stated on their website to be released 2 Feb 2023

Maybe like their on time delivery performance ......often not on time

Not like them. Maybe the floods I guess.....Price creeping up.

Nearly missed this...... not marked price sensitive?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFT/406411/388032.pdf

We remain satisfied with the level of improvement year-to-date. However, general trading conditions late December and into January have been more subdued, particularly across our USA and Asian operations. The combination of lower international sea freight and airfreight volumes and lower trading rates are reflected in reduced revenue and profit before tax levels for both the USA and Asia.
In the past month, domestic transportation in the USA has been less than satisfactory.

A few wrinkles appearing, but no problems all will be well?

Quote from: Left Field on Feb 09, 2023, 11:30 AMA few wrinkles appearing, but no problems all will be well?

Market not quite liking it so much - down almost $4/3%.

Albeit back to where it was on Friday....

Quote from: Sideshow Bob on Feb 09, 2023, 11:35 AMMarket not quite liking it so much - down almost $4/3%.

Agree..... signs margins and growth under pressure. Market doesn't like uncertainty.

Does any other company give detailed sector P&L info like that with their year to date trading updates?
Nice and as transparent as you can ever hope to get from any company.  Top marks for shareholder communication that's for sure!
Doesn't look too bad to me but I guess the trend in some parts of the world is not their friend.

Last 17 weeks revenues and PBT lower than same period last year

That's negative %ages in the context of the big %ages in the report

They say markets are forward looking .....seen the recent past decline and expecting this to continue?

Could be a case of no worries if Kingfish keep buying

A great company facing headwinds.

FY2023 is going to be a stunner no question. Craig's have FY24 EPS at $3.67 which at $74.30 is a PE of 20 which I think is about right and the average over 10 years.

Will look to add if it go's back down to low $60.  Very happy long term holder.

Craig's upgrade target price on update.

A mixed performance
Trading update for 2H to-date
Reuters
MFT.NZ
Bloomberg
MFT NZ
Ticker Exchange
MFT NZC
Price at 09 Feb 2023 Price target - 12mth
74.60 92.30
At the interim result in November MFT commented that revenue growth for the first 5 weeks of 2H was up 2%, with PBT up 11%. For the 17 weeks to the end of January revenue declined 2% and PBT declined 0.8%. While there is some skew towards Christmas trading we estimate this implies the last 12 weeks saw a revenue decline of approx. 4% and PBT down 6%. We expected a declining trend through 2H reflecting some deterioration in economic conditions and as the impact of lower freight rates lapped the strong 2H 22 period. This appears to have been the case with much of the revenue/PBT decline coming from the Air & Ocean (A/O) division, which reported revenue down 18.4% and PBT down 9.3% for 2H to-date.
Vs CIPe - A/O better but Transport weaker
Relative to our estimates the A/O revenue decline was broadly in line with expectations, but with better than expected margins. Offsetting this Transport revenue growth was weaker than expected and margins also weaker. This appears to be largely driven by a poor performance in the US, with Australia and Europe performing well, and NZ 'subdued'. Warehouse revenue and margins were broadly in line with CIPe.
Forecast changes: CIPe lifted but we expect mkt consensus to fall
We have made little change to our FY23 estimates (CIPe PBT +0.8%) with the weaker Transport result offset by the better than expected A/O margins. For later years we have lifted our PBT estimates by 4-5%. However, we note we are materially below consensus PBT for FY23 (CIPe revised to $597m vs mkt ex-CIP $619m).
Price Target $92.30 (prev $81.10). Overweight rating remains
Our Price Target remains based on the average of 1) our forward DCF valuation ($95.20, WACC 8.4%) to incorporate a longer-term view of capital intensity and interest rate movements, and 2) international peer PE multiples (22.0x, $89.40). Our revised Price Target implies a forward PE of 22.7x. The increase in our Price Target reflects an increase in our medium and longer-term forecasts and an increase in peer multiples.

Fbar have also upgraded from $87 to $90 for same reasons.

https://www.nzherald.co.nz/business/truckometer-traffic-data-shows-economic-growth-in-low-gear/ZBKSD26MX5CBJP4BVLH4IENON4/

FB downgrades. Note today

Mainfreight (MFT) enjoyed some significant COVID-19 tailwinds as (1) the freight rate super cycle boosted Air & Ocean (A&O) earnings, and (2) the twin benefits of the flight to quality and just-in-case logistics helped volumes. As the former rapidly unwinds and cyclical pressures impact demand we expect a more challenging trading period through FY24. Group earnings should fall materially, and more so than current consensus expectations, despite management's ability to soften the profit impact of falling freight rates by flexing staff bonuses

Earnings revisions
We materially lower our FY24 and FY25 earnings estimates as shown in Figure 3. The downgrades reflect (1) lower A&O revenue and PBT assumptions to reflect the rapid reduction in freight rates, which MFT will pass-through to customers, and (2) slower progress in Transport as cyclical conditions impact top-line momentum and cost pressures continue to impact margins. Our Warehousing assumptions are largely untouched. Our revised estimates imply a PBT decline of -18% in FY24, yet FY24 PBT is still +132% higher than FY20. Moreover, the PBT CAGR from FY20–FY26E at 19.5% (see Figure 4) is consistent with MFT's long term average

Spoke to a broker today who said the market generally is very quiet with not a lot happening. Thought Mainfreight is an outstanding buy at current prices and has been buying on weakness for portfolios.

Craig's say

DSV was up 4% overnight after reporting its Q1 results. Volumes were soft with DSV commenting on lower market activity resulting in revenue that missed market estimates. However, margins were stronger which they partly attributed to more LCL volumes in the network, and also some head-count reductions, so overall EBIT was ahead of the market. Going forward they expect some improvement in volumes. MFT reports their FY23 result next month and while we are not likely to see material head-count reductions, we could see a similar trend of weaker volumes offset by good margins driven by a higher proportion of LCL volumes

Craig's overnight

MFT/FRE - Maersk – reported their Q1 last night. The result was ahead of expectations, but it confirmed a continuation of the volume and freight price declines seen in the last half of 2022. Sea freight volumes were down 9% and sea freight rates down 37%. The volume declines were largely driven by destocking (particularly retail, lifestyle, and tech goods), and while Maersk expects this to stabilise by mid-year, they were less certain around the outlook for consumer demand in 2H. Retail sales growth in Europe was negative in January and February, and US road freight demand has been mixed but with a downward trend since the September peak. MFT's trading update in early February was most notable for the decline in Air & Ocean revenue which appeared to be price rather than volume driven, and a weaker performance from the US transport operations. Based on the Maersk Q1 commentary we would expect trading for MFT since February has remained challenging with a more subdued short-term outlook.     

Maersk and other major shipping companies have been raping and pillaging over the last couple of years, so good to see their rates come down significantly.

Hapag Lloyd for example just announced a dividend of €67 per share, a total of €11.1B, which was 65% of their profits.....Wiki has them 5th biggest and less than half the size of Maersk.

As for Air & Ocean, presumably with decreasing rates their revenue will decrease (if they work on a % margin).

Craig's today said

Ahead of MFT's result on 25 May, Wade Gardiner has reviewed , in detail, the likely earnings trajectory for the business over the next 18 months. This is partly based on recent reporting from global peers (Chart 1) with the majority reporting a deterioration in Air & Ocean (A&O) operating performance in the December & March quarters as pandemic-related supply chain congestion eases and the heat comes out of Global Freight Rates (Chart 2).
It's important to remember that MFT have already provided a trading update in early February (for 43 weeks) hence the FY23 result essentially covers the remaining 9 weeks of FY23 to 31 March, coupled no doubt with some insight on trading post balance date to early May.
Gardiner has taken a fine scalpel to his FY23 estimates (PBT -1.3% to $589m, consensus $596m) reflecting FX and a slightly weaker A&O run-rate. However, the cut is deeper in FY24 with his PBT lowered to $483m (-9.5%, consensus $534m), this reflects both the expected A&O trajectory (Chart 4) and a revision of Transport forecasts with a more normalised seasonal softness in 1H24 that was not apparent in 1H23 which may partly be attributable to a "COVID-bump" (Chart 3). Gardiner is of the view that a weaker outlook statement may accompany the result later this month given the softer anticipated operating trends in 1H24 as MFT laps its 1H23 numbers....with earnings momentum starting to return from 2H24.
Despite the lack of near-term earnings momentum Gardiner retains the Overweight recommendation for MFT on valuation grounds i.e., its largely in the price. His revised Target Price is $85.20 (last at $71.49) which is based on a 50:50 weighting of his long-term DCF valuation ($90.10) and shorter-term international peer PE multiples (21.6x = $80.30). MFT is currently trading on a rolling 1 Year Fwd. PE of 20.7x.
Hence, despite expectations for a more subdued outlook we are not expecting a significant pull back in the stock with the share price likely to tread water until earnings momentum returns sometime in 2H24.

Quote from: Shareguy on May 11, 2023, 02:44 PMCraig's today said

Ahead of MFT's result on 25 May, Wade Gardiner has reviewed , in detail, the likely earnings trajectory for the business over the next 18 months. This is partly based on recent reporting from global peers (Chart 1) with the majority reporting a deterioration in Air & Ocean (A&O) operating performance in the December & March quarters as pandemic-related supply chain congestion eases and the heat comes out of Global Freight Rates (Chart 2).
It's important to remember that MFT have already provided a trading update in early February (for 43 weeks) hence the FY23 result essentially covers the remaining 9 weeks of FY23 to 31 March, coupled no doubt with some insight on trading post balance date to early May.
Gardiner has taken a fine scalpel to his FY23 estimates (PBT -1.3% to $589m, consensus $596m) reflecting FX and a slightly weaker A&O run-rate. However, the cut is deeper in FY24 with his PBT lowered to $483m (-9.5%, consensus $534m), this reflects both the expected A&O trajectory (Chart 4) and a revision of Transport forecasts with a more normalised seasonal softness in 1H24 that was not apparent in 1H23 which may partly be attributable to a "COVID-bump" (Chart 3). Gardiner is of the view that a weaker outlook statement may accompany the result later this month given the softer anticipated operating trends in 1H24 as MFT laps its 1H23 numbers....with earnings momentum starting to return from 2H24.
Despite the lack of near-term earnings momentum Gardiner retains the Overweight recommendation for MFT on valuation grounds i.e., its largely in the price. His revised Target Price is $85.20 (last at $71.49) which is based on a 50:50 weighting of his long-term DCF valuation ($90.10) and shorter-term international peer PE multiples (21.6x = $80.30). MFT is currently trading on a rolling 1 Year Fwd. PE of 20.7x.
Hence, despite expectations for a more subdued outlook we are not expecting a significant pull back in the stock with the share price likely to tread water until earnings momentum returns sometime in 2H24.

Given that nobody is able to say what next months or quarters oil prices will be ... and how deep the coming recession (if any) will be, I find it quite amazing if people operate in their forecasts with tenths of a percentage changes.

Apart from that - I think more analysts than not expect a somewhat tame recession to come, and we know that well run freight companies always do well at the end of recessions (which is related to business activities picking up and fuel still cheap).

MFT is a well run freight company, i.e. without further ado, I agree it sounds like a good idea to have some of them in ones portfolio.

I do.

Can't beat quality....

https://www.nzx.com/announcements/412006

Result Summary:
Revenue $5.68 billion Up $457 million or 8.8%
Profit before tax $587.4 million Up $98 million or 20.0%
Net profit $426.5 million Up $71 million or 20.0%

• Adjusted for foreign exchange impact, Group revenue is up 4.2%, and profit before tax is up 14.9%.
• Second six-month period, whilst behind year prior, our third strongest six months ever. Profit Before Tax NZ$286 million versus NZ$307 million.
• Profit Before Tax growth over the last three years:
2021 NZ$262 million; 2022 NZ$489 million; 2023 NZ$587 million.
• Operating cash flow improved from $504 million to $757 million.
• A final dividend of 87.0 cents per share has been authorised by the Board of Directors, payable on 21 July 2023.

Another excellent result. Happy holder!

Craig's said
Mainfreight – Rough Road Ahead.   The semi-annual pilgrimage to MFT's Head Office at Railway Lane in Otahuhu for its result briefing took a detour yesterday to MFT's impressive new Warehousing facility at Favona Road (pic of Don & Tim below), a GMT development. The result itself was no surprise with FY23 PBT of $587m broadly in line with market and all credit to MFT for absorbing c$10m in one-off costs in their Australian and American operations without feeling the need to "normalise" and take the costs below the line. As Wade Gardiner notes in a detailed overnight – MFT had already reported 43 weeks through to the end of January, so the result was all about trading in the last 9 weeks and the outlook for 1H24 (Charts 1,2 below). The result was softer at the top line across all 3 MFT divisions (Transport, Air & Ocean, Warehousing) relative to Wade's expectations and slightly weaker at the bottom-line bar the Transport contribution. From a geographic perspective America was the weaker performer reflecting a less mature operation than is now consolidating its leadership team in Chicago.
The Title to Wade's note ('Rough Road Ahead') signals the weaker outlook ahead of a potential trading update from MFT at its AGM on 27 July. MFT note deteriorating macroeconomic conditions, reducing freight volumes and higher inflation as the obvious headwinds with trading in the first 6 weeks seeing "weakness in volumes and activity" which is consistent with commentary from international peers of late.
The challenge for MFT in the current half (1H24) is not just the lapping of elevated Air & Ocean freight rates but also an extremely strong Transport performance that Wade partly attributes to a COVID bounce ... for these reasons Wade has MFT EPS declining 25% in 1H24 on PcP.
Despite the negative short-term earnings momentum Wade retains the Overweight recommendation on MFT with a revised TP of $86.65 (+1.7%) – the long-term story (and value) remains very much intact for MFT with the shares trading on an undemanding 20x PE and a 2.5% yield (40% pay out) supported by a fortress balance sheet (MFT is in a net cash position). There may be some share price weakness leading into the interim result (November) but with cyclicals back in vogue as interest rates peak globally bargain hunters may be disappointed

Quote from: Shareguy on May 26, 2023, 05:44 PMCraig's said
Mainfreight – Rough Road Ahead.   The semi-annual pilgrimage to MFT's Head Office at Railway Lane in Otahuhu for its result briefing took a detour yesterday to MFT's impressive new Warehousing facility at Favona Road (pic of Don & Tim below), a GMT development. The result itself was no surprise with FY23 PBT of $587m broadly in line with market and all credit to MFT for absorbing c$10m in one-off costs in their Australian and American operations without feeling the need to "normalise" and take the costs below the line. As Wade Gardiner notes in a detailed overnight – MFT had already reported 43 weeks through to the end of January, so the result was all about trading in the last 9 weeks and the outlook for 1H24 (Charts 1,2 below). The result was softer at the top line across all 3 MFT divisions (Transport, Air & Ocean, Warehousing) relative to Wade's expectations and slightly weaker at the bottom-line bar the Transport contribution. From a geographic perspective America was the weaker performer reflecting a less mature operation than is now consolidating its leadership team in Chicago.
The Title to Wade's note ('Rough Road Ahead') signals the weaker outlook ahead of a potential trading update from MFT at its AGM on 27 July. MFT note deteriorating macroeconomic conditions, reducing freight volumes and higher inflation as the obvious headwinds with trading in the first 6 weeks seeing "weakness in volumes and activity" which is consistent with commentary from international peers of late.
The challenge for MFT in the current half (1H24) is not just the lapping of elevated Air & Ocean freight rates but also an extremely strong Transport performance that Wade partly attributes to a COVID bounce ... for these reasons Wade has MFT EPS declining 25% in 1H24 on PcP.
Despite the negative short-term earnings momentum Wade retains the Overweight recommendation on MFT with a revised TP of $86.65 (+1.7%) – the long-term story (and value) remains very much intact for MFT with the shares trading on an undemanding 20x PE and a 2.5% yield (40% pay out) supported by a fortress balance sheet (MFT is in a net cash position). There may be some share price weakness leading into the interim result (November) but with cyclicals back in vogue as interest rates peak globally bargain hunters may be disappointed

I like it when Craig's are pessimistic - probably means they are accumulating for their favourite clients :) ;

Anyway - market seem to be optimistic - MFT share passed this week the golden cross - lighting up my NZ portfolio (the European shares are already some time in the green zone :

But back to MFT: Technical indicators looking good (golden cross) ...

Fundamentals looking good as well (with a forward PE of 19 and a forward EPS CAGR of 14 - hey, this is a PEG of 1.34 - not too bad for such a large organisation.

Macroeconomic picture with more and more analysts talking about the real estate bottom reached and immigration rising looks good as well. More people need more stuff. Lots to do for the good trucks from Mainfreight.

I like it when the indicators are aligned and pointing upwards ... while Craigs talks the price down :) ;

I agree that Craigs are generally an excellent counter-indicator.

Annual Report out tody - http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFT/413696/397203.pdf

I've only just developed an interest in charting but tradingview seems to show a very interesting symmetrical triangle chart pattern has been developing over the last year. Difficult to suggest which way it's going to break out but it could  move around $15.00 either up or down when it does - according to https://blog.roboforex.com/blog/2019/08/29/triangle-and-wedge-patterns-in-technical-analysis/#Equilateral_or_Symmetrical_Triangle that is. Personally though can't see it going below $65.

Any more experienced chartists looked at this and can offer any comments?

Quote from: kiwi2007 on Jun 27, 2023, 03:04 PMAnnual Report out tody - http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFT/413696/397203.pdf

I've only just developed an interest in charting but tradingview seems to show a very interesting symmetrical triangle chart pattern has been developing over the last year. Difficult to suggest which way it's going to break out but it could  move around $15.00 either up or down when it does - according to https://blog.roboforex.com/blog/2019/08/29/triangle-and-wedge-patterns-in-technical-analysis/#Equilateral_or_Symmetrical_Triangle that is. Personally though can't see it going below $65.

Any more experienced chartists looked at this and can offer any comments?

Trust me - charting is so much easier and much more reliable with the benefit of hindsight :) ;

Seems like someone is selling MFT in bundles of 101 today at different prices.

Not a good quarter, down 43 percent (PBT). Then again market already pricing in a non covid result. NZ and Australia holding up better than other markets. $1.3 billion of property owned.

Might be a good buying opportunity.

Quote from: Shareguy on Jul 27, 2023, 04:15 PMMight be a good buying opportunity.

Could be; already dropped to below $70 after a short trading halt.

Closed $69.73

Love the take out on that slide that shows June quarter npbt down 43% on pcp


"We have plenty to do"

Mainfreight in FY23 employed 11,311 people in its 331 branches across 26 countries. It took on 981 extra people in FY22 to meet pandemic-fuelled freight demand.

Redundancy's................................

Quote from: Shareguy on Jul 27, 2023, 05:12 PMMainfreight in FY23 employed 11,311 people in its 331 branches across 26 countries. It took on 981 extra people in FY22 to meet pandemic-fuelled freight demand.

Redundancy's................................

Possibly/ probably. That strategy seemed to work for the Nasdaq.

At a glance it seems that the Americas and Asia experienced the greatest drops. Redundancies there perhaps.

The level of decline is more than what analysts were forecasting.  Only one quarter but 19 percent revenue decline is big. The issue is that costs have increased with volumes going down. They have stated that price increases have been instigated.

Do not think there will be a major share price correction. Looks like it's going back to 2021 year as far as earnings go. Trading on high forward PE currently but a quality company with great management.

Will be interesting to see what anyalists come out with. At the end of the day this is not about a loss of customers or market share.

Would like to add but not there yet.

Old share market saying "When transports start to decline run, don't walk for the door".

From
https://www.interest.co.nz/economy/123256/us-data-releases-impress-us-regulators-move-force-banks-hold-more-capital-eyes-boj

"The cost of containerised freight rose last week, a second week this has happened and confirming the bottom may have been reached. This was driven by outbound cargo rates from China to the US. Meanwhile bulk cargo rates were little-changed."

Their link:
https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry

Going for a dive this morning. Time to dip a toe in the water.....

Quote from: Onemootpoint on Jul 28, 2023, 10:56 AMGoing for a dive this morning. Time to dip a toe in the water.....

Too early to swim

Talk of a global 'freight recession' in this 1 minute Bloomberg video:

https://www.youtube.com/watch?v=rDuXjrZ36-A

Looks messy, weight is more breakdown than up.

MFT_2023-07-31_20-06-29.png

Craig's have EPS of $2.85 for 2024F. PE of 24. Far weaker than expected.

Based on DSV which is on a PE of 23 implies spot $68.15

I don't think a lot is going to happen to share price until November report.

The Americas, which enjoyed the biggest up-tick in recent years, has experienced the sharpest reversal of fortunes, with PBT down -81% against 1Q23.


https://www.cnn.com/2023/08/01/business/yellow-corp-driver-jobs

Quote from: Shareguy on Aug 03, 2023, 06:54 AMThe Americas, which enjoyed the biggest up-tick in recent years, has experienced the sharpest reversal of fortunes, with PBT down -81% against 1Q23.


https://www.cnn.com/2023/08/01/business/yellow-corp-driver-jobs

30 000 people out of jobs, just like that. The company handled 7% of LTL shipments.
Seems like debt was the overloading factor here. Times are getting rough.

Quote from: Onemootpoint on Aug 04, 2023, 01:33 AM30 000 people out of jobs, just like that. The company handled 7% of LTL shipments.
Seems like debt was the overloading factor here. Times are getting rough.

Agree debt and a very strong union. Huge opportunity for MFT however big risk for a NZ company. Time will tell but could go horribly wrong.

From what I'm hearing and seeing in retail in NZ, i have concerns for volumes going forward. This might not be the last cockroach in the kitchen.

However a great company which I have a large holding. Not buying more.......yet

Yes and rates arnt going down any time soon?

Feb is not cutting this year and maybe not even next? Oil heading up.. up up...

Freight rates have fallen back to around their pre-covid period.  Inflation makes the situation  worse. The tough times for the freight industry are likely to continue.

The keynote speaker at a Trans-Tasman Business Council event this morning, Auckland port's chief executive Roger Gray said trade volumes had fallen by about 30 percent in the last quarter.

Quote from: Shareguy on Aug 04, 2023, 06:51 AMAgree debt and a very strong union. Huge opportunity for MFT however big risk for a NZ company. Time will tell but could go horribly wrong.

From what I'm hearing and seeing in retail in NZ, i have concerns for volumes going forward. This might not be the last cockroach in the kitchen.

However a great company which I have a large holding. Not buying more.......yet

Yellow Trucking's bankruptcy filing spurs run-up in transport stocks

https://www.youtube.com/watch?v=_V5dXp5oZkA

Opportunities await.....in the States despite the "freight recession".

Long term supporters Fisher Funds selling down

https://www.nzx.com/announcements/417783

Share price seems to be holding up despite the headwinds.

Given Fisher Funds poor kiwi saver performance not sure what this means.

Quote from: Shareguy on Sep 06, 2023, 05:42 PMLong term supporters Fisher Funds selling down

https://www.nzx.com/announcements/417783

Share price seems to be holding up despite the headwinds.

Given Fisher Funds poor kiwi saver performance not sure what this means.

Could it be just 'rebalancing' their funds? MFT hold a fairly big position in their managed and KiwiSaver funds

Quote from: Onemootpoint on Aug 04, 2023, 01:33 AM30 000 people out of jobs, just like that. The company handled 7% of LTL shipments.
Seems like debt was the overloading factor here. Times are getting rough.

Lucky MFT have a much more solid balance sheet, isn't it?

... and not so sure about redundancies with them either. Sure - they will reallocate their people as sensible and necessary, but getting rid of them does not really fit to the family atmosphere they try to create in their teams.

Not many families make family members redundant if times get a bit tougher. "Dad - we don't need you anymore, please go". Probably more a time to tighten the belts and prepare for the next boom.

Lets not forget - it is always freight compannies leading the market out of recesessions ... and MFT is a good one.

Yes. MFT is a good one.
At the time of the Yellow Corp announcement I recall competitor commentators implying Yellow's demise will be good for business....in hushed and 'saddened/ shocked' tones. New opportunities.

Continued breakdown bottom looks to be around 57.50$.

MFT_2023-09-27_21-48-43.png

I won't be surprised if NYSE market pressures continue well  into October. The will most probably push the shareprice down from here.

Given the state of the market I see more pain ahead. Move result not good or a number of international players.

Freightways agm had profit warning. DSV result soft. Putting MFT on the DSV multiple implies a price of around $54-55

Caught up with fastener distribution owner who said freight rates are back to pre COVID levels for all destinations.

While MFT typically surprise on the upside will wait and see before I add.

Getting cheaper by the hour.....under $59 already.

https://www.cnn.com/2023/11/03/business/maersk-layoffs-shipping-boom-bust?cid=ios_app

I expect a really tough half year - lower volumes, lower prices, higher costs in inflationary environment. Squeezed from all sides. Good business but tide out.

Might be quite a while before the tide changes again too.  I remember warning on this one when it got very close to $100 and the tide was fully in.  If my memory serves me correctly quite a few holders were not appreciative of my cautious notes.  The problem with market darlings on elevated multiples is that everything has to continue to stay perfect for the stock to continue to outperform, (and it seldom does).

Quote from: Basil on Nov 04, 2023, 12:29 PMMight be quite a while before the tide changes again too.  I remember warning on this one when it got very close to $100 and the tide was fully in.  If my memory serves me correctly quite a few holders were not appreciative of my cautious notes.  The problem with market darlings on elevated multiples is that everything has to continue to stay perfect for the stock to continue to outperform, (and it seldom does).

The problem with predictions is that people only tend to warm them up if they happened to be correct ... nobody carries his wrong predictions on their tongue. Sort of like the analysts who predicted 25 of the last 2 downturns.

But sure - we all know that stock prices - like ships in the sea - go up and down with the waves and the tide. Nothing to crow about, unless you are a trader.

What we do know however is that great transport companies like MFT will be the first to appreciate when the current crisis is over. They always do. Last time (after the first Covid shock) I bought a parcel of MFT somewhere in the mid 30íes - and yes, they nearly moved up to $100. I sold at this stage some of them (just rebalancing my portfolio) and actually repurchased some more recently.

Of course - one always needs to look at the fundamentals, but with MFT on a forward PE of 13 and a forward earnings CAGR of 16.6, are the numbers very undemanding. This is a PEG (Zulu Principle) of 0.8 - pretty spectacular for such a large company!

I think one of the key values of the forum is when people have the courage to share diverse opinions that go against the grain of group think.  The fact is very few people do mainly because of all the negative crap that gets thrown their way in response.   Relax mate, nobody thanked me for cautioning on PAZ when it was $1, OCA at $1.40, ATM at $21 or FPH at over $30 to name just a few.  In fact, quite the opposite.  All I got was heaps of s**t thrown at me for my trouble.

Nobody is disputing that MFT is not a great well managed company, I certainly never have but there are good times and bad times in their industry and there seemed little point to me in buying when all the ducks were in alignment and quacking loudly.  MFT's time will come again but I don't think its anytime soon.  We'll find out more about their current year metrics shortly.  I seriously doubt it's as good as you suggest.  Maybe I am wrong, I don't follow all that closely.
Good luck and best wishes.

Maersk's result was interesting given we have Mainfreight reporting 1H24 on Thursday.  Said issues are more around excess shipping supply than demand. Freight rates were down 58% on pcp, and Maersk commented it expects a subdued macroeconomic outlook and soft volumes for the coming years.

Maersk commented that supply side risks create a very uncertain trading environment with significant further downside risk potential.

FB are expecting a large drop in profit but as MFT have never cut their divi should maintain at $.85. 

EPS forecast of $1.20 against 1H23 of $2.15.

Not long to wait.  Could be a great buying opportunity

Result out.....42% drop in profits...

https://www.nzx.com/announcements/421320

Revenue $ 2.36 billion Down 21.6%
Profit before tax $174.8 million Down 42.1%
Net profit $124.55 million Down 42.6%

Met consensus on EPS and divi.

At close of $57.59 EPS forecast full year $2.50 is a PE of 23.

In comparison

DSV 16.6 from FB
KN 20.4

Quite a bit of commentary on CNBC lately from the C Suite of shipping companies saying they're expecting soft trading conditions for the foreseeable future, some exec's suggesting 2-3 years.  If things pan out as those exec's are expecting then a forward PE of 23 still looks a bit expensive to me, (notwithstanding they're a very well managed company with a great reputation for customer service).

Market likes it so what would I know.  Based on their outlook statement I see them doing about $250m after tax for FY24 and on 100.7m shares that's $2.48 eps.
On the latest price this morning of $62 a couple of minutes ago that's a forward PE of 24.8 (a long way north of the 13 suggested by another poster above)....so still on "market darling" metrics despite the share price correction in recent times.

Quote from: Basil on Nov 09, 2023, 10:06 AMQuite a bit of commentary on CNBC lately from the C Suite of shipping companies saying they're expecting soft trading conditions for the foreseeable future, some exec's suggesting 2-3 years.  If things pan out as those exec's are expecting then a forward PE of 23 still looks a bit expensive to me, (notwithstanding they're a very well managed company with a great reputation for customer service).

Market likes it so what would I know.  Based on their outlook statement I see them doing about $250m after tax for FY24 and on 100.7m shares that's $2.48 eps.
On the latest price this morning of $62 a couple of minutes ago that's a forward PE of 24.8 (a long way north of the 13 suggested by another poster above)....so still on "market darling" metrics despite the share price correction in recent times.

In my view is measuring the companies PE performance at the typical low point for the industry about as sensible than measuring the sea level at low tide with a wave just rolling out ... and planning the dikes accordingly.

The good times for freight companies come with the next economic upturn and, while it is everybody's best guess when this might happen (I think 2024 rather than 2025 or later), we know that historically the freight companies are part of the first bunch to rise (due to lower fuel costs and increased freight volumes).

Commentary from Mainfrieght in their presentation was all about this being more "normal trading conditions", (not tide out as you suggest BP), after last year's highly unusual "spring tide"  Felt to me like they were talking about the tide being at a normal level, (half tide if you like).

Let me put it this way, if the forward PE was really the 13 you suggested the other day I'd definitely be a buyer because its a very well managed business with a great future ahead of it.  At ~ 25 times forward earnings and a gross yield of 3.8% I'm happy to leave it to others. 

I'd rather just keep buying a great growth company on forward metrics of 10 times forward earnings and ~ 8.5% gross yield.  You know the one. 😉

Quote from: Basil on Nov 09, 2023, 11:13 AM.....  At ~ 25 times forward earnings and a gross yield of 3.8% I'm happy to leave it to others..... 
 

Totally get your conservative PE musings however the market seems to be saying MFT worth a premium..... SP up 9% or $5.22 today. Not bad those that purchased at recent lows.

"Globally, September air cargo traffic was up +1.6% from the same month ago, and the fastest growing region was the Asia/Pacific region (+4.2). But the overall levels arte still -1.8% lower than in September 2019, and -3.2% lower in the Asia/Pacific."

 https://www.interest.co.nz/economy/125146/us-data-lackluster-drought-effects-bite-beef-markets-china-plays-fire-over

Quote from: Basil on Nov 09, 2023, 11:13 AMI'd rather just keep buying a great growth company on forward metrics of 10 times forward earnings and ~ 8.5% gross yield.  You know the one. 😉

Please share here sir

Quote from: entrep on Nov 10, 2023, 08:44 AMPlease share here sir

He has in great detail!  It eez a company growing steadily and not requiring a 'Turner'-round, eef you get my dreeft.

RB

Quote from: Red Baron on Nov 10, 2023, 10:00 AMHe has in great detail!  It eez a company growing steadily and not requiring a 'Turner'-round, eef you get my dreeft.

RB

Mainfreight?

https://stocktalk.co.nz/index.php?topic=104.0

I kid, thanks both :D

"Also rising, and more sharply than in the prior week, container freight rates were up +7% last week. Rates out of China to both the US and Europe drove the increase. Bulk cargo rates have started rising again."

https://www.interest.co.nz/economy/125168/us-jobless-claims-rise-china-slips-deflation-ping-loses-apple-loses-air-travel

Craigs thoughts

MFT is currently trading on a rolling forward PE of 21.6x, which is ahead of key peers (DSV 18.6x / FRW 19.2x) and in line with the NZX50 average of 21x. Our DCF valuation implies good upside (spot DCF $73.77 / forward $79.20), but we think the market will remain cautious around the recovery in the macro environment before assigning materially greater value. The Air & Ocean operation, and in particular the long-term margins that can be achieved, remains the key uncertainty in our view. This is unlikely to be resolved in the near-term and could remain as an overhang until demand/supply in the global forwarding market is more balanced.
Price Target $69.00 (prev $78.20)
Our Price Target remains based on the average of 1) our forward DCF valuation ($79.20, WACC 8.5%) to incorporate a longer-term view of capital intensity, and 2) international peer PE multiples (18.6x, $58.80).

$58.80 .....

Recent week price action is a counter trend move within an existing downtrend, expect price to retest $57.39 measured move line.MFT_2023-11-12_09-06-35.png

Great to see the share price appreciating.  Congrats to those that topped up or added. FB positive report labeled "The cream de la cream" was released today which might of been the catalyst for todays rise.

https://www.cnbc.com/2024/01/03/maersk-shares-gain-after-shipping-firm-extends-red-sea-pause.html

Craigs this morning.  Has the share price got ahead of itself?

•   MFT – Over the past couple of days DSV, CH Robinson, and Old Dominion (MFT global comps) have reported Q4 earnings. Wade Gardiner has cast his eye over the results and notes that in general they have been fairly weak. CHR and Old Dominion reported softer than expected Q4 Domestic (mainly US) freight volumes, with some commentary around higher opex (esp personnel costs) at the high-end of expectations. In Ocean freight CHR and Old Dominion reported that Q4 demand has remained soft, in line with previous quarters, with revenue reflecting the year-on-year decline in freight rates. In comparison DSV was more bullish around their road and sea freight results and margins, although they weren't immune to lower market activity and year-on-year freight rate declines. A key focus area with MFT at present is Air & Ocean margins, which for DSV remained strong in Q4 and consistent with prior periods....Gardiner notes sea freight rates in January have risen as a result of trade lane disruptions (Red Sea and water depth issues in the Panama Canal), but there is no indication of an upturn in demand. It is hard to know how long the Red Sea disruptions will continue for but there was some commentary from CHR that elevated rates will remain until at least the Chinese New Year, with some relief through 2024 as new vessel capacity continue to enter the market.   

I think heard recently that 15% of NZ's imports/exports go via the Red Sea.

Gosh MFT thread languishing at the back pages. Is the love lost for such a quality stock.

Fbar latest says Management is due to report its FY24 result on 29 May 2024 and they expect a positive message on the outlook. MFT currently trades at ~21x one year forward PE which is not expensive in my opinion.

FB think lack of a year end trading update/earnings downgrade provides confidence that its commentary at the interim result was accurate and that 2H24 will at the very least meet market expectations, which implies a ~+NZ$40m PBT uplift on 1H24.


Not long to wait. If FB are right should be catalyst for uptrend.

Quote from: winner (n) on Oct 27, 2022, 08:28 AMMainfreight share price only high cause they a great company.

They should be extremely proud of their high share price ...... let them take the kudos for it

It possibly gives more credibility where it matters (money markets)

An Aussie paper would not have suggested Mainfreight NZ greatest company if its share price was $7

Let them keep the bragging rights ....no share split ...it'll only cheapen them

Most of the reasons for share splits in that article are unsubstantiated .... Just a good story imo

I like thier balance sheet.

MFT seems to track nicely with inverted NZ 10 Year albeit with 2-4 week delay.

SmartSelect_20240412_142126_Clip Studio.jpg

Quote from: Cod on Apr 12, 2024, 02:27 PMMFT seems to track nicely with inverted NZ 10 Year albeit with 2-4 week delay.

SmartSelect_20240412_142126_Clip Studio.jpg

So numba go up or down?

Results out......tough times.

https://www.nzx.com/announcements/431909

Result Summary:
Revenue $4.72 billion Down 17%
Profit before tax $395.4 million Down 33%
Net profit before abnormals $277.9 million Down 35%

• Adjusted for foreign exchange impact, group revenue is down 18%, and profit before tax is down 33%.
• An abnormal accounting (non-cash) adjustment of NZ$69 million relating to the tax treatment of depreciation on New Zealand owned property.
• Operating cash flows declined from $757 million to $505 million and reflects the reduction in profitability for the period.
• A final dividend of 87.0 cents per share has been authorised by the Board of Directors, payable on 19 July 2024.

be interesting to see if this sector leads the way out of the inflationary  environment when and it the OCR moves down.
 

 

Quote from: Shareguy on Feb 02, 2024, 11:13 AMCraigs this morning.  Has the share price got ahead of itself?

•    MFT – Over the past couple of days DSV, CH Robinson, and Old Dominion (MFT global comps) have reported Q4 earnings. Wade Gardiner has cast his eye over the results and notes that in general they have been fairly weak. CHR and Old Dominion reported softer than expected Q4 Domestic (mainly US) freight volumes, with some commentary around higher opex (esp personnel costs) at the high-end of expectations. In Ocean freight CHR and Old Dominion reported that Q4 demand has remained soft, in line with previous quarters, with revenue reflecting the year-on-year decline in freight rates. In comparison DSV was more bullish around their road and sea freight results and margins, although they weren't immune to lower market activity and year-on-year freight rate declines. A key focus area with MFT at present is Air & Ocean margins, which for DSV remained strong in Q4 and consistent with prior periods....Gardiner notes sea freight rates in January have risen as a result of trade lane disruptions (Red Sea and water depth issues in the Panama Canal), but there is no indication of an upturn in demand. It is hard to know how long the Red Sea disruptions will continue for but there was some commentary from CHR that elevated rates will remain until at least the Chinese New Year, with some relief through 2024 as new vessel capacity continue to enter the market. 

I think Craigs who have been all over this in recent months calling it fully priced have been bang on the money. 

Just as an aside, I do wonder a bit about the morality of charging such high commission fees and rates to customers when freight rates went through the roof during Covid, but that's just my opinion and its ancient history now.

Nobody in their right mind would own this for the dividend yield, that's for sure. 

Sure, international trade and with-it freight, will pick up again in the next up cycle, but when's that going to be? 

https://www.youtube.com/watch?v=lcfvrXyNSLE

Pretty weak performance continues in the key Americas region. Seems key to MFT truly becoming a global success story. Hold but on the fence and not topping up at this level.

Jarden commented, "We continue to see FY24 as a
trough year for earnings, with Domestic Freight growth
offsetting likely A&O margin normalisation. MFT did not
provide earnings guidance but noted satisfactory post
year-end trading in ANZ, some work to do to lift volumes
and utilisation in Europe and improvement in US
Transport is likely to take some time.
Target price lifted to $82.00 (was $80.30); Overweight
rating reiterated.

Ran into Don Braid recently at the coffee shop. Said words I liked "normalising supply chains", "improving" Got the impression that it's upwards from here.

Disc/ My largest holding on the NZX currently

Mainfreight doing it tough in first 15 weeks with revenue up 8.5% and NPBT down 11.2%. And that is compared to a softer year last year too. Profitability very low in USA and Europe - a lot of work to do become global success story. Potential is there but can they do it?

Market not happy today. Down $6.00 as I write.

https://api.nzx.com/public/announcement/435082/attachment/423342/435082-423342.pdf

Quote from: Mos on Jul 25, 2024, 04:32 PMMainfreight doing it tough in first 15 weeks with revenue up 8.5% and NPBT down 11.2%. And that is compared to a softer year last year too. Profitability very low in USA and Europe - a lot of work to do become global success story. Potential is there but can they do it?

Mainfreight's profitability is obviously correlated to the overall economy, measured e.g. by the ANZ truckometer index, which took a nose dive last month.

That's what their earnings do show - if less goods are shipped, and they can't or don't want to reduce capacity to the same amount, than their profitability will nosedive.

So, I guess you question is non-sensical - the current situation has nothing to do with MFT's capabilities.

The answer is quite simple: If you believe that the world economy will run into the ground and never recover, then obviously MFT will need to reduce its capacity accordingly.

If you are however one of the people who learned that linear extrapolations are easy, but long term always wrong, then you might realise that things will go up again as well, and I have no doubt that a company managed as well as MFT will thrive on the economic upleg.

Hint: transport typically goes up before other industries follow. Quite simple reason: other industries need to use transport to increase their production. Given that markets seem to assume an economic upswing in 6 months or so (well, this is what my portfolio tells me), maybe now its the time to load up good transport companies.

MFT is one of them.

I don't believe it is that simple BP. Mainfreight have a very profitable business in New Zealand and Australia, and have had for some time. These businesses are still reasonably profitable now when the tide is out from an economic point of view. However, outside the Covid induced Supply Chain mayhem, Mainfreight have never earned strong returns in the USA or Europe. What they have achieved historically is impressive, but to kick on from here they must find a way to earn returns in these key markets that has eluded them to date. I don't think you can pin it all on economic conditions.   

Quote from: Mos on Jul 25, 2024, 05:17 PMI don't believe it is that simple BP. Mainfreight have a very profitable business in New Zealand and Australia, and have had for some time. These businesses are still reasonably profitable now when the tide is out from an economic point of view. However, outside the Covid induced Supply Chain mayhem, Mainfreight have never earned strong returns in the USA or Europe. What they have achieved historically is impressive, but to kick on from here they must find a way to earn returns in these key markets that has eluded them to date. I don't think you can pin it all on economic conditions.   

I don't believe it is that simple BP.

It rarely is ... unless of course the beating up of companies during tough economic times.


Look, They started in NZ and Ossie and - as you say, they have build a great base.

They then expanded ... and most people understand that you first need to establish and grow a product or service before you can make money with it. Its called "investing".

They used to produce very satisfactory results (including in the new bases) - and lets face it, they are still profitable despite times being pretty tough. Again - have a look at the ANZ truckometer. Pretty respectable to still produce the results they do, but sure, linear extrapolation on the way down from the Covid peak gives you clearly other results.

Just wondering - if you think the economy has nothing to do with it ... why don't you just give us a list of a handful of currently thriving international transport companies, which are doing at the moment both much better than over the last couple of years as well as much better than Mainfreight :p ?

I see currently most of them in "consolidation phase", just like Mainfreight - or even a bit lower.

Can you give us one clearly outperforming Mainfreight?

From Craig's this morning - will come back to you BP when I have more time

MFT – Wade Gardiner was present at Eden Park for the Mainfreight ASM yesterday afternoon. MFT's trading update for the 15 weeks to mid-July initially sent the shares down 10% before closing off their lows at $71.20 (-8%). MFT Group revenue was +8.5% for the period but PBT declined 11.2% (-$10.5m). This was a weaker start to the year than anticipated and market consensus for FY25F PBT was for +6.2% growth to $420m prior to the ASM. The weakness appears broad-based from a geographical perspective with Australia the exception (revenue +17.5%, PBT +7%, margins 80bip weaker at 7.6%). From a product perspective Transport was resilient but Warehousing remains problematic which reflects a combination of lower activity levels & over capacity in some areas. Air & Ocean margins remain under pressure with margins down from 8.3% to 6% YoY. As Wade Gardiner's title suggests ("It's a marathon not a sprint") it is still early days in the FY25 year but given weakness in the NZ economy (revenue was flat, PBT -20%) and the time it may take to turnaround performance in US/Europe he has lowered his FY25F PBT from $422m to $397m (-6%). Gardiner's revised Target Price is $72.70 based off a 50:50 combination of 1) rolling 1 Yr Fwd PE of 21x (consistent with peers, implies $67.20) and his DCF valuation of $78.20. Neutral recommendation retained.

Sales up but profit down. More work to do Don says.

Craig's take

A marathon, not a sprint
ASM trading update: YTD PBT down 11%
 At the ASM today MFT provided a trading update for the 15 weeks to mid-July. Group revenue increased 8.5%, but PBT declined 11.2% (-$10.5m). This was a far weaker start to the year than we had expected, and compares to existing market consensus PBT for FY25 of +6.2% to $420m (CIPe $422m). Revenue growth was in line with FY market consensus (+8.1%), but margins were down across all product segments. Warehouse margins were very weak at 4.0% (vs 5.9% pcp), and Air & Ocean margins were 6.0% (vs 8.3% pcp). Across the geographies the Australian business was again the highlight and posted the only positive PBT growth (+7.0%), although margins across all areas declined on pcp.
The weak Warehouse result is a continuation of that seen in 2H 24, with low levels of utilisation and activity, particularly in Europe. While the timing is hard to know, we do expect some improvement through the remainder of the year as activity increases and new customers are added in Europe, and as overflow sites are exited in Australia. The Air & Ocean margins are of more concern as we think some of the margin decline reflects competitive dynamics and excess shipping capacity, particularly in the US and Asian businesses. It is hard to see a quick resolution to this but we have seen A/O margin volatility in the past when freight prices have been changing, and global logistics peer, DSV, reported their Q2 results yesterday with fairly stable 'Air & Sea' margins.
CIPe for flat PBT on pcp
With a $10.5m headwind to start the year our existing forecast for FY25 PBT now seems optimistic. Accordingly we have lowered our PBT forecast from $422m to $397m. This is broadly flat on FY24, and implies +4% PBT growth for the remainder of FY25.
Price Target $72.70 (prev $74.85). Neutral rating retained
On our revised estimates MFT is trading on a rolling forward PE of 24.5x, Our Price Target remains based on the average of 1) our forward DCF valuation ($78.20, WACC 8.4%) to incorporate a longer-term view of capital intensity, and 2) international peer PE multiples (21.0x, $67.20). The change in our Price Target reflects forecast changes offset by a reduction in interest rates since our last update, and an increase in peer multiples from 18x to 21x

A mixed bag is how I see the investor day.

NZ has been a real drag while Australia has continued to increase in both revenue and PBT.

Overall sales up 8.5 percent but PBT below expectations and down 9 percent against last year.

It's a downgrade and possibly more to come in this cycle.  I'm sensing we might be over the worst of it, certainly in NZ. The prize in the Americas is huge and Don is determined.

Don said that volume is improving across most operations including NZ with confidence that the current upward trajectory will continue.

This is a quality growth company with great management and a history of exceeding expectations. Its trading in line with global peers and based on estimates is a forward PE of 24.

Quote from: Shareguy on Oct 09, 2024, 08:48 PMA mixed bag is how I see the investor day.

NZ has been a real drag while Australia has continued to increase in both revenue and PBT.

Overall sales up 8.5 percent but PBT below expectations and down 9 percent against last year.

It's a downgrade and possibly more to come in this cycle.  I'm sensing we might be over the worst of it, certainly in NZ. The prize in the Americas is huge and Don is determined.

Don said that volume is improving across most operations including NZ with confidence that the current upward trajectory will continue.

This is a quality growth company with great management and a history of exceeding expectations. Its trading in line with global peers and based on estimates is a forward PE of 24.

Here is the presentation:

https://api.nzx.com/public/announcement/439631/attachment/429043/439631-429043.pdf

... and yes, while PBIT is going to be down, its not really a downgrade. Pretty much in line with analyst consensus, which by the way predicts as well an increase of NPAT. Haven't modelled the numbers myself, but well possible that their tax payments dropped faster than their profit did. Tax is always a lagging payment ... and they might be now through the Covid hump.


Anyway - one of a small number of really outstanding NZ businesses with  a shareprice probably a fair reflection of its value.

Expect them to go up over the coming recovery, though not really expecting to break through the 2021 heights anytime soon. But hey, this is just me trying to predict what the hype curve might do, and I never was good in that particular discipline.

Discl: used to hold a XL parcel until July and sold half of them. Happy to see the sales proceedings growing faster than the MFT shares (actually MFT dropped), but as well happy to keep the other half in MFT.
.
Great company ... adding long term growth and relative stability into any portfolio.

Quote from: BlackPeter on Oct 10, 2024, 10:47 AMHere is the presentation:

https://api.nzx.com/public/announcement/439631/attachment/429043/439631-429043.pdf

... and yes, while PBIT is going to be down, its not really a downgrade. Pretty much in line with analyst consensus, which by the way predicts as well an increase of NPAT. Haven't modelled the numbers myself, but well possible that their tax payments dropped faster than their profit did. Tax is always a lagging payment ... and they might be now through the Covid hump.


Anyway - one of a small number of really outstanding NZ businesses with  a shareprice probably a fair reflection of its value.

Expect them to go up over the coming recovery, though not really expecting to break through the 2021 heights anytime soon. But hey, this is just me trying to predict what the hype curve might do, and I never was good in that particular discipline.

Discl: used to hold a XL parcel until July and sold half of them. Happy to see the sales proceedings growing faster than the MFT shares (actually MFT dropped), but as well happy to keep the other half in MFT.
.
Great company ... adding long term growth and relative stability into any portfolio.

I have only seen the FB research so far and they stated it missed on PBT. As far as NPAT goes FB also forecasting less than last year. ($270m against $276m). It's only one analyst, and we agree that history says they could be wrong.

The market likes the volume growth and in a falling market is a great outcome. Don says they are growing market share and working on profit.

With the OCR cuts we should see increased demand in NZ. Confidence is returning and it's time for the NZX to shine.

Fair value currently for a quality stock. But agree it's upwards from here......

Quote from: Shareguy on Oct 10, 2024, 12:00 PMI have only seen the FB research so far and they stated it missed on PBT. As far as NPAT goes FB also forecasting less than last year. ($270m against $276m). It's only one analyst, and we agree that history says they could be wrong.

The market likes the volume growth and in a falling market is a great outcome. Don says they are growing market share and working on profit.

With the OCR cuts we should see increased demand in NZ. Confidence is returning and it's time for the NZX to shine.

Fair value currently for a quality stock. But agree it's upwards from here......

Unless I specify a source my numbers are analyst consensus from market screener. They still show a growing NPAT (they call it Net Income) for FY2025: https://www.marketscreener.com/quote/stock/MAINFREIGHT-LIMITED-6492059/finances/

But anyway - individual analyst are as often wrong as they are right .. and so is the analyst consensus. The only thing it is good for is to define the current market expectations. It does NOT indicate what is really going to happen in the future.

That's the thing with the future, nobody can predict it :) ;

Not a lot new in the release at the headline level given MFT provided a trading update in Dallas last month

In terms of outlook commentary.
   "Challenging trading conditions continue in all regions, Strong sales activity levels continue with a number of customer gains committed for second half, Capex expenditure and lease commitments being aligned with customer growth – a number of new sites/expansions continue. Confidence of further revenue and profitability improvements, Well-positioned for improving economic conditions when it arises"

Mainfreight NPAT history on chart

Back to pre-covid trend .....possibly expect +15% pa from here

That's pretty good

Also highlights how mad the world was during the pandemic ...but it generated heaps of one off profits eh

IMG_5978.png

^Thanks Winner.  That's and excellent image that beautifully encapsulates what I believe many of us on here have known for quite some time, that being, the huge gains from the Covid era would be temporary. 

Oh dear.

Anybody seen what happened to Mainfreights shareprice? Don crushed it. And no, I am not talking about the amazing CEO of this great company, I am talking about Don the idiot throwing handgranades frem the rosegarden of his residence into the wheels of global trade.

Glad I sold my parcel out a couple of months ago. I had some inkling ... Trump in January, stockmarkets tanking in February, bear market in March and depression starting in April?

On the bright side ? Even Adi's 1000 years lasted only twelve ... and just imagine, what opportunities this will create for the future. Buy Mainfraight some day again around $30 like in the good old Covid recession? Maybe even cheaper? Who knows.   

Quote from: BlackPeter on Apr 09, 2025, 10:59 AMTrump in January, stockmarkets tanking in February, bear market in March and depression starting in April?

What's interesting is that some people have started to fancy their chances of being a bottom picker in this market.  I wonder how many realize that the last time there was a huge trade tariff war was the early 1930's and a great depression is exactly what happened, followed by a huge world war. I really hope history doesn't repeat....sadly it has an uncanny habit of doing exactly that.  Just as well this time its different...or can we be sure of that ?
KW's advice seems best at this time.  Don't buy shares in a downtrend with no idea of when that downtrend will end.

Quote from: Basil on Apr 09, 2025, 01:20 PMWhat's interesting is that some people have started to fancy their chances of being a bottom picker in this market.  I wonder how many realize that the last time there was a huge trade tariff war was the early 1930's and a great depression is exactly what happened, followed by a huge world war. I really hope history doesn't repeat....sadly it has an uncanny habit of doing exactly that.  Just as well this time its different...or can we be sure of that ?
KW's advice seems best at this time.  Don't buy shares in a downtrend with no idea of when that downtrend will end.

I have to agree , President Trumps main objective is war with china not just a trade war he wants to crush them & remain the dominant world superpower, hegemonic is the buzz word at the moment.
We will have to pick sides as the world is changing and trummpie will demand allegiance or more tariffs the main reason for the tariffs is leverage .

For some reason MF  stock has shown weakness lately.  Even Asian shipping stocks were hard hit. Given the global uncertainty,in the short run this sector could underperform the market.

Quote from: Mr Cashflow on Apr 14, 2025, 07:14 PMFor some reason MF  stock has shown weakness lately.  Even Asian shipping stocks were hard hit. Given the global uncertainty,in the short run this sector could underperform the market.

Agreed.
MFT_2025-04-15_13-07-40~2.png

FY25 PBT is expected to be ahead of market consensus of $375m, with the US operation at around 7% of FY25 group PBT.

Craigs had forecast $371m PBT so it's a slight positive.

Has been great buying lately in my opinion for long term holders.

Craigs forecast EPS FY25 $2.62


https://www.nzx.com/announcements/450909

SHIPPING - Scrambling to gauge how President Trump's tariffs are flowing through the global economy, investors are seeking early signs in data from ports, truckers and railroads. Ryan Petersen, chief executive of Flexport, a San Francisco-based freight forwarder, said China-to-U.S. bookings have declined 60% since April 9. Petersen said that for the first time since his company was launched more than a decade ago, Vietnam is a bigger origin point. And ocean carriers have been cancelling sailings across the Pacific Ocean to the U.S. Almost 30% of such journeys were cancelled for the week ended May 4, according to Flexport. At the Port of Los Angeles, imports are expected to fall 35% this week compared with a year ago. "That's going to have a huge impact on the logistics industry," Petersen said. "Consumers probably won't see this until later." https://www.wsj.com/business

Gosh a shocker of an update at the agm.

PBT down 24%. Glad I got out.

FB TP $71 neutral

Gosh it must have been a shocker.  Market gave them a good beating.  I'm guessing FB might revise their price target after that update ?

Latest from Craigs

Gardiner thinks margins may remain under pressure for the balance of the year from a weak operating environment and competitive pressures. After the first 4 months PBT is already $23m behind pcp, and he has lowered his FY26 PBT forecast from $407m to $354m (implying FY26 PBT down 7.8% on FY25). His TP reduces to NZ$68.80 (-12%)

FB $71

When I posted this chart at end of F25 I said Mainfreight profit back to long term trend now pandemic issues all over

Oops ...looks like they've still got a way to go seeing how F26 is h heading

IMG_6209.png

For Bar update. DISC. Dont hold.

Mainfreight (MFT) reported a tough start to FY26 at its Annual Shareholder Meeting (ASM), with a material decline in year-to-date profitability relative to the prior year. MFT's almost three-year earnings downgrade cycle continues. With revenue growth marginally positive year-to-date, the sharp drop in earnings stems from further margin pressure across all three products (Transport, Warehousing and Air & Ocean). This appears to be largely cyclical: (1) gross margin declines due to competitive pressures; (2) operating de-leverage from weaker volumes; and (3) opex inflation. As has happened at various times in MFT's history, a weak start to the financial year can be offset, and despite sequentially improving performance year-to-date, in this instance the magnitude of the year-to-date decline and the relatively soft prior-year comparative suggest this is unlikely in FY26. Despite this unfavourable earnings backdrop and repeated downgrades over the past three years, MFT still offers long-term growth potential, as illustrated by further new customer wins. NEUTRAL

What's changed?
Earnings: FY26 PBT cut by -13%, FY27 by -10%
Target price: Lowered to NZ$71 from NZ$77 due to material earnings downgrades
Weak start to FY26
MFT has endured a challenging start to FY26. Sales growth has slowed (+1.5% in the first 17 weeks vs +14.0% in 2H25), margins have fallen materially across all three products, and PBT is down -24% against the prior year. MFT refers to four key influences: (1) the shorter trading weeks in April/May; (2) the tariff-related uncertainty across key trade lanes impacting both A&O rates and volumes; (3) the lack of any A&O project work, particularly in Australia; and (4) continuing losses in the US Transport business.

Sequentially improving
June/July 2025 sounds better than April/May 2025. Moreover, management is confident that performance will continue to improve through the second half of FY26. We expect this sequential improvement will stem from a combination of self-help at a branch level with greater than normal margin focus, further new customer wins, and improving cyclical conditions without the tariff-related uncertainty that impacted early FY26. Our updated forecast implies that PBT falls by ~-4% over the remainder of FY26.

Anxiety increasing, but no cause for panic
MFT's almost three-year earnings downgrade cycle continues. For many companies, this would have dented the belief of even the most ardent supporters, but not for MFT. Its one-year forward PE multiple remains in step with its closest global peers, and at a premium to pre-COVID levels. The business remains capable of generating consistent double-digit profit growth through the cycle.

Still looking for new earnings base; NEUTRAL
MFT's first 17 weeks of FY26 have been extremely challenging. PBT is down -24% against the prior year, despite a sequential improvement in performance through June/July 2025. The trading environment has been difficult, with cyclical pressures weighing on a business that has been subject to an earnings normalisation process since the peak of the freight super-cycle in 2022. We accept that our confidence in calling MFT's earnings trough has been misplaced over recent history (we now assume trough-cycle PBT of ~NZ$350m, which is still materially higher than that generated in FY19 [~NZ$200m]), albeit largely due to evolving external factors (economic cycle, tariff uncertainty etc). These pressures should ease, providing some scope for sustained earnings growth to continue. The key question is when? We expect the sequential improvement in performance (observed by management) in June/July 2025 to continue through 2H26, but only to the extent of limiting the year-on-year declines. Growth will likely only resurface from FY27. Investors need to remain patient.

With the current backdrop, a ~24x one-year forward PE appears full but fair relative to its closest global freight peers.

MFT is one of those stocks that really track the health of the economy, in much the same way as the Dow Transports has always been a very important index (and used to confirm the direction of the Dow Industrials).  

I think that stocks like SUM and MFT picked up in the expectation that the housing market and NZ economy would improve over the second half, but its turning out to not be the case.  We are still stuck in a recessionary environment, with not that much light at the end of the tunnel being visible.  

If you are holding any other economically sensitive stocks in your portfolio, now would be an optimum time to review them, before they drop their earnings updates.

Quote from: KW on Jul 31, 2025, 02:59 PMIf you are holding any other economically sensitive stocks in your portfolio, now would be an optimum time to review them, before they drop their earnings updates.

This should be a continual process for any investor IMO.

Throughout 2024/25 I have been adjusting my portfolio to make it a lot more 'defensive' in light of projected economic uncertainty and 'Trump effects.' 

I don't hold MFT.

Will be interesting to see whether price candles just revisit's $56.93 Support line or sets up shop below it.
MFT_2025-07-31_18-12-05.png

Has anyone done any work on what the long term, say 10 year CAGR in EPS is ?

Quote from: Basil on Jul 31, 2025, 07:56 PMHas anyone done any work on what the long term, say 10 year CAGR in EPS is ?

that trendline on the chart I posted yesterday has NPAT growing at 15% pa

The super cycle in 22/23 pretty dramatic eh

I still see Mainfreight back on track over the next few years

Thanks Winner.  Share price seems about right to me with that CAGR and PE.  No wonder retirements funds like them with a CAGR like that.

PE does not come below 20 until 2028,while the dividend is very modest.

Forbar ;
Valuation (x)   25A   26E   27E   28E
PE   22.0   24.4   20.3   17.9
EV/EBIT   16.5   17.8   15.1   13.5
EV/EBITDA   9.4   9.6   8.7   8.0
Price / NTA   3.6   3.5   3.3   3.0
Cash div yld (%)   2.9   2.9   2.9   2.9
Gross div yld (%)   4.0   4.0   4.0   4.0

Quote from: lorraina on Aug 01, 2025, 11:38 AMPE does not come below 20 until 2028,while the dividend is very modest.

Forbar ;
Valuation (x)   25A   26E   27E   28E
PE   22.0   24.4   20.3   17.9
EV/EBIT   16.5   17.8   15.1   13.5
EV/EBITDA   9.4   9.6   8.7   8.0
Price / NTA   3.6   3.5   3.3   3.0
Cash div yld (%)   2.9   2.9   2.9   2.9
Gross div yld (%)   4.0   4.0   4.0   4.0

but by then the share price will be much higher and PE will still be in mid 20's

And the dividend will remain very modest.

Quote from: lorraina on Aug 01, 2025, 11:38 AMPE does not come below 20 until 2028,while the dividend is very modest.

Forbar ;
Valuation (x)   25A   26E   27E   28E
PE   22.0   24.4   20.3   17.9
EV/EBIT   16.5   17.8   15.1   13.5
EV/EBITDA   9.4   9.6   8.7   8.0
Price / NTA   3.6   3.5   3.3   3.0
Cash div yld (%)   2.9   2.9   2.9   2.9
Gross div yld (%)   4.0   4.0   4.0   4.0

Thanks for sharing.
I can still see why the insto's like it with their historical growth rate relative to those forward PE's but I can't help wondering as they've already pretty much filled out their service offer in terms of global logistics capabilities, whether future growth might be slower than what's been achieved previously during their logistics expansionary phase.  In other words, the law of diminishing growth going forward as they've got bigger and bigger over the years, seems like a highly plausible theory to me.   Slower growth = lower forward PE's in the future.  Maybe not going back to a PE in the mid 209's in FY28 as Winner has suggested ?
I curious, what do others think ?

I think at its core, MFT potential competitive advantage can really only stem from some superior administration, leadership and/or customer service. Not really a robust moat, cultures change, organisations stagnate, competitors restructure.  MFT had to and still has to take market share to keep growing at the rate it did, and it still seems priced as if this will occur. Risk seems weighted to the downside.

I think it really pays to consider an individual investment against just buying globally diversified ETFs, and I think on a risk vs opportunity basis MFT doesn't stack up to that at the moment.

Quote from: Mos on May 29, 2024, 08:51 PMPretty weak performance continues in the key Americas region. Seems key to MFT truly becoming a global success story. Hold but on the fence and not topping up at this level.

Quote from: Mos on Jul 25, 2024, 04:32 PMMainfreight doing it tough in first 15 weeks with revenue up 8.5% and NPBT down 11.2%. And that is compared to a softer year last year too. Profitability very low in USA and Europe - a lot of work to do become global success story. Potential is there but can they do it?

Quote from: Mos on Jul 25, 2024, 05:17 PMMainfreight have a very profitable business in New Zealand and Australia, and have had for some time. These businesses are still reasonably profitable now when the tide is out from an economic point of view. However, outside the Covid induced Supply Chain mayhem, Mainfreight have never earned strong returns in the USA or Europe. What they have achieved historically is impressive, but to kick on from here they must find a way to earn returns in these key markets that has eluded them to date. I don't think you can pin it all on economic conditions.   

Not much has changed over the past year except the tide has gone out a bit further.

They pleased with new customers likely boost sales by $324 million this financial year

Quote from: winner (n) on Aug 01, 2025, 08:34 AMthat trendline on the chart I posted yesterday has NPAT growing at 15% pa

Has the number of issued shares also changed?  If not then EPS growth will be the same as NPAT, otherwise it may be different.

Quote from: Ferg on Aug 01, 2025, 08:11 PMHas the number of issued shares also changed?  If not then EPS growth will be the same as NPAT, otherwise it may be different.

Very little change of issued shares in the last 9 years of records I have.

I've always had a soft spot for MFT but never held.

I like the company/staff/management ethos and it's no bullsh*t reporting.

However, on an international scale I can't see what MFT's unique moat is v competition and consider MFT is v exposed to negative world events such as recessions and tariffs.

The USA share market's reaction to Trumps latest Tariffs and his firing of  labor statistics chief hours after data showed employment growth slowed hardly inspires confidence in a USA led recovery.

Quote from: Left Field on Aug 02, 2025, 03:50 PMI've always had a soft spot for MFT but never held.

I like the company/staff/management ethos and it's no bullsh*t reporting.

However, on an international scale I can't see what MFT's unique moat is v competition and consider MFT is v exposed to negative world events such as recessions and tariffs.

The USA share market's reaction to Trumps latest Tariffs and his firing of  labor statistics chief hours after data showed employment growth slowed hardly inspires confidence in a USA led recovery.

I see them as a well managed transport company. They are usually in the first lot to gain after a recession - and yes, when things go downwards, they will be the first to fall.

Currently not holding, but we will know in hindsight, whether this is the right step.

Overall I'd say they are currently again on the value side, but only history will show how far they will keep dropping before they go up again.

Quote from: BlackPeter on Aug 03, 2025, 10:13 AMI see them as a well managed transport company. They are usually in the first lot to gain after a recession - and yes, when things go downwards, they will be the first to fall.

Currently not holding, but we will know in hindsight, whether this is the right step.

Overall I'd say they are currently again on the value side, but only history will show how far they will keep dropping before they go up again.

Agree. Looking for re entry point at some stage.

MFT still struggling.....

https://www.nzx.com/announcements/462487

Group Result Summary HY26 v HY25
 Revenue NZ$2.61 billion up 2.1%
 Profit before tax (PBT) NZ$131.72 million down 18.3%
 Net profit NZ$93.38 million down 18.5%
 

 

I'm surprised the share price is up this morning, albeit on low volume.

Results were slightly softer than expected across the board, particularly from Australia which appears to be due to one-off project activity in the prior year. MFT's commentary indicated the underlying operations in Australia are performing satisfactorily.  The Americas operation posted a loss at the PBT level in 1H. The NZ result was broadly in line. 

The interim dividend has been set at 85c, same as last year. For the full year if we assume a repeat of the 172c paid in FY25 and this again assumes an increase in the payout from the historical level of 40%. Operating cash flow was good given the slight decline in profitability.
   
There was no specific earnings guidance for FY26. In general, the outlook statement was positive. MFT expects improvement in NZ and Australia with increasing volumes from customers. In Europe cost savings are expected to increase profitability. In the US they are gaining market share, but adequate returns will take some time.   

A soft result but broadly expected and the outlook statement points to some improvement in 2H.  Im picking we have seen the bottom and upwards and onwards from here.  Quality well run company.

Disc: Recently become a holder again

@basil do you have a view on MFT?

Quote from: Shareguy on Nov 12, 2025, 10:22 AM.....A soft result but broadly expected and the outlook statement points to some improvement in 2H.  Im picking we have seen the bottom and upwards and onwards from here.  Quality well run company.

Disc: Recently become a holder again

I've always liked MFT and am watching from the sidelines as a non-holder.

However I won't be buying at these levels.

TA  not looking auspicious IMO.

Ferg sums up the FA nicely...

"Last year's profit was $274m, last 3 half years were $115m -> $159m -> $93m.

It is the labour & all the 'other' costs impacting NPAT, but not transport costs which have improved. BOTFP suggests labour costs will be up $100m in FY26 with the other line items roughly cancelling each other out, for a NPAT impact of -$72m....assuming sales are roughly flat.

If we take the latest HY of $93m and double it to a generous $200m (which is a fall of $74m), that is ~$2 EPS. At $60 that is P/E of around 30.

With labour costs on the rise, it won't be easy to get back to $274m in FY26 or FY27.

High P/E stocks react a lot worse to earnings targets misses than low P/E stocks so no rush for a contrarian buy IMO....I'm happy to be on the sidelines for now."

Thanks for the shout-out earlier today.

I agree with this part 100%:

Quote from: Left Field on Nov 12, 2025, 11:15 AMI've always liked MFT and am watching from the sidelines as a non-holder.

However I won't be buying at these levels.

It's a great company....just a bit expensive for my taste.

Quote from: Ferg on Nov 12, 2025, 08:36 PMIt's a great company....just a bit expensive for my taste.

MFT just got more expensive....   SP @ $68.50 up $5.50 or 8.73% for the day. Up over 10% since the update.

Good interview with Don Braid on RNZ today..... he's confident MFT is over the worst.

Seems the market agrees. I better review my thinking!

For Bars review for those interested

We upgrade Mainfreight (MFT) to OUTPERFORM from NEUTRAL, following a softer-than-expected 1H26 result, but one where management provided a more positive outlook, suggesting the company is now through an earnings-cycle inflection point. The first half was characterised by margin pressure across most operations, but this eased over the final two months as revenue growth accelerated. This underlying business improvement is likely to continue into 2H26, driven predominantly by accelerating Australasian activity reflecting new business wins and cyclical green shoots. MFT's ability to accelerate profit growth out of a down cycle is due to consistent customer acquisition—often at sub-optimal rates—that are subsequently reset as conditions improve. This time should be no different. OUTPERFORM.

What's changed?
Earnings: FY26 and FY27 largely unchanged. FY28 PBT up +5%.
Target price: Up to NZ$76 from NZ$68 to reflect: (1) upgrades from FY28; (2) re-rating of peers; and (3) time value of money.
Rating: Upgrade to OUTPERFORM from NEUTRAL.
Business momentum turning ...
Following a ~2.5-year earnings downgrade cycle, MFT's positive outlook commentary suggests it is past the earnings inflection point, with upgrade risk now more prescient. With signs of a top-line acceleration in Transport and Warehousing (and geographically in New Zealand), we're now confident that earnings growth is back in play. While we recognise that Air & Ocean remains reliant on the volatile rates backdrop, sustained above-market volume growth is supportive of a more optimistic outlook.

... despite loss-making headwinds
All is not yet rosy, though. MFT has two loss-making operations that are weighing on its results—US Transport and CaroTrans—the former is core to long-term growth but is sub-scale and generates sub-optimal gross margins; it will likely be a drag on performance for the foreseeable future. The latter is non-core (in our opinion) but has generated strong returns through the cycle.

Not cheap, but quality rarely is
MFT currently trades at ~23x one-year-forward PE. This is broadly on par with the simple average of its three closest global freight peers: DSV (DSV.CO) at ~23x, Kuehne & Nagel (KNIN.S) at ~19x, and Old Dominion (ODFL.O) at ~27x. Moreover, it's consistent with its five-year (~24x) and 10-year (~22x) averages. While its forward multiple is fair rather than cheap, the growth potential beyond the next 12 months is attractive, particularly given continued volume momentum.

Upgrade to OUTPERFORM
Mainfreight (MFT) has endured a prolonged earnings downgrade cycle reflective of: (1) elevated expectations at the peak of the freight-rate super-cycle; (2) continued normalisation of Air & Ocean margins; and (3) weaker economic conditions in key markets, including MFT's largest historic profit centre, New Zealand, which has impacted Transport and Warehousing profitability. Its one-year-forward consensus PBT was ~NZ$380m prior to the 1H26 result, similar to what it was in September 2021 (refer to Figure 1) as freight rates were on their upswing. We expect this to now sequentially increase over the near to medium term, given the weight of earnings growth in FY27 and beyond, providing MFT with an ongoing growth dynamic that has been absent for some time.

During MFT's earnings downgrade cycle, investors have been willing to pay on average ~22x one-year-forward PE. While it now trades marginally higher at ~23x on our revised estimates, broadly consistent with its key international peers (see Figure 2), we believe investors are more than compensated by the earnings growth that will lower this multiple over time. For example, on a PEG basis (one-year-forward PE relative to second-year EPS growth), MFT currently trades at ~1.3x. In contrast, when MFT similarly traded at ~23x prior to COVID in mid-2019, its PEG was much more expensive at ~1.9x. We certainly don't think MFT is cheap, but with increasing confidence that it will deliver earnings growth over the medium term, we now have sufficient conviction to increase our rating to OUTPERFORM.

Earnings revisions
We make largely immaterial changes to our earnings estimates in FY26 and FY27 but apply more material upgrades to FY28, as shown in Figure 3. We anticipate steadily improving economic conditions, particularly in New Zealand, to support a reversal (cognisant of year-on-year declines in 1H26) and subsequent acceleration in earnings growth over the medium term. We expect this to be primarily driven by Transport and Warehousing. In contrast, we hold a more conservative view on Air & Ocean, given the influence of air (relatively stable and well above pre-COVID levels) and sea (more volatile) freight rates on performance. Our group margin estimate in FY28 of 7.6% compares with MFT's FY20 margin of 6.7%.

Result summary
MFT reported a soft 1H26 result (PBT down -18% against the prior year), which was marginally below consensus but showed evidence of sequential improvement since the disappointing late-July trading update, with further improvement likely to benefit 2H26. While group revenue grew +2%, assisted by currency movements (~+3%), margins have been under pressure across each of its three products and all geographies ex Asia. Volume growth remains robust (transport tonnage +3.6%, sea freight +7.0%, airfreight +5.0%), with new business wins continuing to feature strongly. At a regional level, the Americas is loss-making due to ongoing US Transport losses and weaker CaroTrans performance. Encouragingly, New Zealand is seeing strong new business wins and same-customer volume growth. MFT has retained its fully imputed 85c interim dividend.

Historically, MFT had a reputation for adjusting reported profits with one-off abnormals. The 1H26 result appears clean (i.e. reported performance is consistent with underlying). However, several disclosures suggest amendments could apply to the comparative period in 1H25. First, the discontinuation of Air & Ocean project work in order to focus on core activities created a ~-NZ$10m PBT headwind in 1H26, which should reduce to ~-NZ$4m in 2H26. We don't believe any adjustment should be made for this but it does help inform our view on underlying performance through 2H26. Second, MFT acknowledged (disappointingly, for the first time) that 1H25 PBT included €3.2m of property-disposal profits, which exacerbated the apparent margin pressure in Europe in 1H26.

Quote from: entrep on Nov 12, 2025, 10:46 AM@basil do you have a view on MFT?

Sorry entrep, I don't follow it closely enough to add any value to the discussion..

Quote from: Left Field on Nov 13, 2025, 07:11 PMMFT just got more expensive....   SP @ $68.50 up $5.50 or 8.73% for the day. Up over 10% since the update.

Good interview with Don Braid on RNZ today..... he's confident MFT is over the worst.

Seems the market agrees. I better review my thinking!

Interview with Don

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/don-braid-mainfreight-ceo-on-the-companys-20-percent-profit-drop/