Infratil has been receiving benefits of two positive factors this month - the potential acquisition by Z Energy of Chevron NZ and the falling dollar, Forsyth Barr broker Peter Young says.
Incorporating the post-Chevron offer Z valuation into Infratil added 16c per share (cps) to Infratil. Chevron operated Caltex in New Zealand.
''We see further up side from the acquisition if it is successful, as the synergy benefits of combining the two businesses are material and it is not hard to envisage Infratil's net asset value increasing a further 10cps.''
There was little chance Infratil would sell its Z stake in the near term, he said.
Also, while Z had good growth opportunities in front of it - particularly if it was able to buy Chevron - Infratil was unlikely to sell unless it was able to better deploy the capital. .
The fall in the New Zealand-Australian dollar cross rate from A99c in late May to about A90c now was a benefit for Trustpower, given a third of its operating earnings now came from Australian wind farms, Mr Young said.
Infratil's Perth Energy and RetireAustralia business values were also helped by the currency fall.
Combined, the fall in the currency had been the primary driver for Infratil's value increasing 12cps since it reported its full-year result in May.
In the past year, Forsyth Barr's Wellington International Airport valuation had increased 20% to about $600 million, he said. In the same period, Auckland Airport's share price had increased nearly 40%.
Forsyth Barr's Wellington Airport valuation was discounted cash flow driven and the improved market sentiment towards Auckland Airport was not captured. While not changing the Wellington valuation methodology, by applying the Auckland valuation appreciation to Wellington, it would add 10cps to 15cps to Infratil's net asset value.
''Our rating is neutral. Infratil's businesses are generally performing well and some have good upside in addition to our current assessed value.
''In addition, the dividend yield is moderately attractive. While we have a positive disposition towards Infratil, there are some wrinkles in the form of NZ Bus and Perth Energy.''
Forsyth Barr had increased it net asset value of Infratil by 30cps to $4.07 and increased the target price by 15cps to $3.50.
