Contact Energy Valuation

Q: What is the Fair Price of CEN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CEN (A$8.14) is trading below our estimate of [[fair value]] (A$22.93)

Is CEN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of CEN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CEN (A$8.14) is trading below our estimate of fair value (A$22.93)

Significantly Below Fair Value: CEN is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CEN?

Key metric: As CEN is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for CEN. This is calculated by dividing CEN's market cap by their current earnings.
What is CEN's PE Ratio?
PE Ratio	30.6x
Earnings	NZ$235.00m
Market Cap	NZ$7.18b

CEN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.1x
Enterprise Value/EBITDA	13.1x
PEG Ratio	6.9x

Price to Earnings Ratio vs Peers

How does CEN's PE Ratio compare to its peers?

The above table shows the PE ratio for CEN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	12x
ORG Origin Energy	13.4x	-4.4%	AU$18.7b
AGL AGL Energy	10.6x	-2.3%	AU$7.5b
APA APA Group	9.6x	-25.4%	AU$9.3b
LPE Locality Planning Energy Holdings	14.3x	n/a	AU$28.7m
CEN Contact Energy	30.6x	4.4%	AU$7.2b

Price-To-Earnings vs Peers: CEN is expensive based on its Price-To-Earnings Ratio (30.6x) compared to the peer average (12x).

Price to Earnings Ratio vs Industry

How does CEN's PE Ratio compare vs other companies in the Global Electric Utilities Industry?

9 Companies	Price / Earnings	Estimated Growth	Market Cap

9 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: CEN is expensive based on its Price-To-Earnings Ratio (30.6x) compared to the Global Electric Utilities industry average (14.7x).

Price to Earnings Ratio vs Fair Ratio

What is CEN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CEN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.6x
Fair PE Ratio	20.3x

Price-To-Earnings vs Fair Ratio: CEN is expensive based on its Price-To-Earnings Ratio (30.6x) compared to the estimated Fair Price-To-Earnings Ratio (20.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst CEN forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	AU$8.14	AU$8.79 +7.9%	8.0%	AU$9.71	AU$7.83	n/a	4
Nov ’25	AU$7.62	AU$8.83 +15.9%	8.0%	AU$9.76	AU$7.88	n/a	4
Oct ’25	AU$7.45	AU$8.98 +20.6%	7.7%	AU$9.77	AU$7.98	n/a	4
Sep ’25	AU$7.73	AU$9.27 +19.9%	9.1%	AU$10.22	AU$7.94	n/a	5
Aug ’25	AU$8.19	AU$9.10 +11.1%	9.2%	AU$9.94	AU$7.82	n/a	5
Jul ’25	AU$8.43	AU$9.61 +13.9%	8.9%	AU$10.35	AU$8.01	n/a	5
Jun ’25	AU$8.48	AU$9.17 +8.1%	9.9%	AU$10.11	AU$7.56	n/a	5
May ’25	AU$7.67	AU$8.99 +17.2%	9.8%	AU$9.98	AU$7.46	n/a	5
Apr ’25	AU$7.72	AU$8.81 +14.1%	12.6%	AU$10.20	AU$7.53	n/a	5
Mar ’25	AU$7.60	AU$8.84 +16.3%	11.9%	AU$10.33	AU$7.62	n/a	5
Feb ’25	AU$7.50	AU$8.53 +13.7%	13.1%	AU$10.27	AU$7.19	n/a	5
Jan ’25	AU$7.60	AU$8.24 +8.4%	13.7%	AU$10.14	AU$6.78	n/a	5
Dec ’24	AU$7.59	AU$8.24 +8.5%	13.7%	AU$10.14	AU$6.78	n/a	5
Nov ’24	AU$7.16	AU$8.40 +17.3%	13.2%	AU$10.10	AU$6.89	AU$7.62	5
Oct ’24	AU$7.55	AU$8.77 +16.2%	11.2%	AU$10.26	AU$7.65	AU$7.45	5
Sep ’24	AU$7.55	AU$8.63 +14.3%	11.2%	AU$10.20	AU$7.56	AU$7.73	5
Aug ’24	AU$7.70	AU$8.38 +8.9%	11.2%	AU$9.93	AU$7.21	AU$8.19	5
Jul ’24	AU$7.46	AU$8.21 +10.0%	10.9%	AU$9.64	AU$7.07	AU$8.43	5
Jun ’24	AU$7.31	AU$8.37 +14.5%	10.5%	AU$9.75	AU$7.23	AU$8.48	5
May ’24	AU$7.45	AU$8.29 +11.3%	10.7%	AU$9.62	AU$7.25	AU$7.67	5
Apr ’24	AU$7.29	AU$8.37 +14.8%	10.8%	AU$9.68	AU$7.30	AU$7.72	5
Mar ’24	AU$7.08	AU$8.20 +15.8%	11.2%	AU$9.42	AU$7.10	AU$7.60	5
Feb ’24	AU$7.11	AU$7.90 +11.2%	14.3%	AU$9.43	AU$6.65	AU$7.50	5
Jan ’24	AU$7.25	AU$8.07 +11.3%	14.8%	AU$9.53	AU$6.78	AU$7.60	5
Dec ’23	AU$7.10	AU$8.07 +13.6%	14.8%	AU$9.53	AU$6.78	AU$7.59	5
Nov ’23	AU$7.13	AU$8.10 +13.7%	13.2%	AU$9.43	AU$7.12	AU$7.16	5

Analyst Forecast: Target price is less than 20% higher than the current share price.

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