Pushpay pushes market down

Pushpay Holdings led the New Zealand share market lower as it took another sharp dive to its lowest price since May last year.

Friday, November 12th 2021, 8:32PM

by BusinessDesk

The S&P/NZX 50 Index fell 118 points, or 0.9%, to 12908.15. Turnover was $176.6 million.

Church donation software company Pushpay plunged 8.1% to $1.47 with almost 10 million shares – worth more than $14m – changing hands.

The stock is now down 20% since reporting somewhat soft half-year earnings on Wednesday, despite some analysts remaining positive on the company’s outlook.

Morningstar analyst Shaun Ler was particularly upbeat, trimming just 15 cents off his $2.20 target price and telling investors to “keep the faith in Pushpay’s growth story”.

“Today’s results do not alter our long-term view. We believe digital donations will grow and customers will remain sticky,” Ler wrote on Wednesday.

Analysts at Macquarie, meanwhile, hacked 9% from their target pricing bringing it down to $1.70 – still 15% above the current price.

It wasn’t just Pushpay falling sharply though, Fisher & Paykel Healthcare dropped 4.4% to $30.53 with no obvious reason.

The hospital hardware exporter’s half-year earnings result is not due for another two weeks but will be scrutinised for clues about what will happen to revenue after the pandemic.

Mainfreight fell 4.4% to $90.65 despite analysts excitedly predicting its pandemic-related earnings boost will continue well into next year.

The two other significant decliners were A2 Milk, down 2.6% at $6.22, and Genesis Energy which fell 1.9% to $3.12.

Higher interest rates continue to weigh down share prices, even in light of strong earnings.

Jarden analysts left their Mainfreight target price, $97, unchanged today, saying the higher profits were balanced out by higher risk-free discount rates.

BNZ rate strategist, Nick Smyth said swap rates climbed almost 10 basis points yesterday implying traders see a 45% chance the official cash rate could be hiked 50 basis points this month.

Markets are priced as if the Reserve Bank of New Zealand will take the OCR to almost 3% by mid-2023, he said.

It wasn’t all doom and gloom on the share market though, with more stocks climbing than falling.

Top of the board was Rakon which jumped 7.4% to $1.59 after hiking its earnings guidance for the second time in the past three months.

The company now expects to report underlying earnings between $44m and $49m, up more than $10m from guidance given in April.

Stock market operator NZX climbed 1.1% to $1.78 with Forsyth Barr analyst Jamie Foulkes praising their decision to purchase management rights of some retirement funds.

“This appears to be a relatively sensible acquisition to us, adding to the growing momentum of the Smartshares business generated in recent years,” he said.

Infratil climbed 0.9% to $8.23 as it reported half-year results boosted by the billion-dollar sale of Tilt Renewables.
The NZ dollar was trading at 70.19 US cents today, down from 70.66 as the US dollar climbed on the back of expectations its central bank may have to tighten monetary policy.

Tags: Market Close