Brokerage firm Morningstar has expressed a positive outlook on Manawa Energy’s future earnings, although the company’s shares are currently underperforming.

Despite anticipating drier conditions, Morningstar expects steady good performance from the renewable energy company in the upcoming second quarter.

The brokerage firm anticipates electricity prices to be ‘well-supported’ in the future, suggesting high fuel and carbon costs will push up operating costs for thermal power stations.

It estimated a fair value for Manawa of NZ$6.30 per share.

Additionally, Morningstar predicts a nearly flat EBITDA for fiscal 2024, with an average 6% growth in EBITDA over the medium term thereafter.

The firm’s revenue and operating margin forecasts are based on normal hydrological conditions.

Three out of the four analysts rate the stock ‘hold’ and one rates it ‘sell’; the median target price is A$5.06, according to LSEG data.

The company’s stock has fallen 11.2% year-to-date as of the last closing.

Manawa Energy is a company specializing in renewable energy resources.