The old Telecom NZ, SPK delivered a disappointing 1H23 result last week but the outlook is expected to improv, the issue for us is the stock has run hard and if it doesn’t deliver on these expectations we could see SPK at $4 in rapid fashion. However, the company has announced a NZ$350mn on-market buyback starting April 5thwhich should prove supportive of the stock as is its forecast 5.15% yield.
- We like the SPK business but the risk/reward is not exciting around $4.60.