Infratil share price falls after preliminary FY2020 guidance announcement

The Infratil Limited (ASX: IFT) share price has fallen 1.50% on the company's Infratil 2019 Investor Day and following an update providing softer preliminary guidance for FY20.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Infratil Limited (ASX: IFT) share price has fallen 1.50% on the company's Infratil 2019 Investor Day and following an update providing softer preliminary guidance for FY20.

What guidance did Infratil provide?

Today's announcement on Infratil's Investor Day follows Wednesday's announcement in which the company downgraded its FY19 guidance for underlying earnings before interest, tax, depreciation, amortisation and other unrealised gains (EBITDAF) to NZ$535 million – NZ$545 million (down from (NZ$580 million – NZ$620 million).

Infratil announced that preliminary EBITDAF guidance from continuing operations is expected to be between NZ$510 million – NZ$540 million, with a breakdown provided below:

  • Trustpower EBITDAF guidance of NZ$205 million – NZ$225 million
  • Tilt EBITDAF guidance of A$122 million – A$129 million
  • CDC's reported EBITDA including Infratil's A$52 million share
  • Longroad contribution assumes 3 development project gains together with the Rio Bravo development gain
  • No amounts are included in guidance for NZ Bus or Perth Energy
  • No Incentive Fees are forecast

Overall, the FY20 underlying EBITDAF guidance figure of NZ$525 million represents a 2.8% decline from the forecast NZ$540 million in FY19 and investors have reacted poorly to the news this morning.

Is Infratil in the buy zone?

The Infratil share price is up 14.2% so far this year but has dipped more than 5% since last Thursday's 52-week high of $4.16 per share due to the recent profitability updates.

While there has been a minor correction of sorts, I still think Infratil might be a little on the expensive side despite the potential for share price support from technical traders at the current valuation.

Australian gas and electricity prices remain elevated from supply-side shocks which have boosted returns for Infratil and fellow energy competitors AGL Energy Ltd (ASX: AGL) and Beach Energy Ltd (ASX: BPT) in 2019.

Given the recent trend of declining results, I think I'd be steering clear of Infratil at the moment and checking out this buy-rated stock in a booming $22 billion industry instead.

Should you invest $1,000 in Red 5 right now?

Before you buy Red 5 shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Red 5 wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

Did you catch what happened with the big 3 ASX 200 mining stocks in April?

BHP, Rio Tinto, and Fortescue all reported their latest mining results in April.

Read more »

Miner looking at a tablet.
Resources Shares

After its earnings result, what's Macquarie's price target on Fortescue shares?

Let’s dig into what Macquarie thinks of Fortescue after its quarterly update.

Read more »

Two mining workers on a laptop at a mine site.
Resources Shares

The Mineral Resources share price is down 72% in a year. Time to pounce?

Two top experts ran their slide rules over Mineral Resources shares. Here’s what they found.

Read more »

Miner looking at a tablet.
Resources Shares

Mineral Resources share price shoots 15% higher on third-quarter report

The ASX 200 iron ore and lithium giant has released its 3Q FY25 activities report.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why Macquarie says this ASX 200 mining stock could rocket 67% in a year

Macquarie forecasts a big potential rebound for this diversified ASX 200 miner.

Read more »

Female miner smiling at a mine site.
Resources Shares

3 reasons why the Fortescue share price could still be a buy

Here’s why I view Fortescue as an opportunity.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

Here's the latest earnings forecast out to 2029 for Rio Tinto shares

Let’s unearth what this mining giant is predicted to achieve.

Read more »

Female miner smiling in front of a mining vehicle.
Resources Shares

Is the BHP share price a buy? Here's UBS' view

Let’s dig into what an expert thinks of this mining giant.

Read more »