Vector's 2015 result was driven by a strong regulatory performance with customer numbers and volumes up for both the electricity and gas transportation segments, Craigs Investment Partners broker Chris Timms said.
Relocation projections and the lagged impact on the growth in transmission volume were likely to show a strong benefit in the 2016 financial year and there would be a short-term benefit from adding new big customers to the network.
Craigs had marginally reduced its target price on Vector to $3.36. Due to limited upside to the target price, Craigs retained its hold recommendation.
Key risks included regulatory uncertainty and the impact of the depletion of domestic gas reserves, he said.
Vector shares last traded at $3.20.
Craigs Investment Partners has upgraded Cavalier Corp to hold, with broker Chris Timms saying debt is improving but no relief is in sight for carpet margins.
Adjusted reported profit of $1.2 million was better than expected as a result of a stronger contribution from wool-scouring and tax credit.
Carpet earnings were in line with forecasts but margins were weaker. The sale of loss-making Ontera would lift earnings by about $2.8 million and improved net debt by $6.5 million.
A recovery in wool grease price and a better New Zealand-Australian dollar exchange rate were behind the strong performance from wool sourcing.
''We have upgraded our forecasts and target price to reflect the sale and wool scouring recovery. At current levels, the stock is trading relative with our target price and we upgrade to hold.''
Cavalier shares last traded at 44c and Craigs 52-week target price was 49c.
Australian analyst Morningstar has put the energy sector under review, pending long-term oil price updates.
Included in the under-review stocks is New Zealand's Z Energy which analyst Mark Taylor said had successfully increased its gross fuel margin by 20%.
Z Energy said yesterday it was in talks with the New Zealand Customs Service, the outcome of which could have a material one-off negative impact on earnings.
There was insufficient clarity around what the financial impact might be and the company said it was not in a position to update earnings guidance. Z was informing the market as it had received a communication from Customs outlining that a potential impact across the four shareholders of the Wiri fuel terminal (WOSL) in Auckland could be about $71 million in total. Z's share was estimated to be $25 million, although it was not possible to predict what the final financial impact might be.
Mr Taylor said he had reservations about Z owning of a stake in New Zealand's only refiner, comparatively modest though it was.
Refineries were low margin and capital intensive but Z Energy has many favourable attributes making it an attractive investment at the right price.
