Should I buy Fonterra Shareholders' Fund stock in 2025?

What is the Fonterra Shareholders' Fund?

How much is the Fonterra Shareholders' Fund stock?

The price of Fonterra Shareholders' Fund stock is rising this week. As of now, the stock trades at NZ$6.15, up 0.33% over the past 24 hours and showing a robust weekly increase. The fund commands a market capitalisation of NZ$660.58 million, with a 3-month average daily volume of 72,962 shares. Investors note a P/E ratio of 8.19 and an attractive forecast dividend yield of 7.18%, while the stock's beta stands at a low 0.07, indicating limited price swings. With its combination of strong dividend potential and very low volatility, FSF remains a standout choice for NZ investors seeking steady returns.

Our full analysis on the Fonterra Shareholders' Fund stock

We have undertaken a comprehensive review of Fonterra Shareholders' Fund’s most recent financial statements and share price evolution over the past three years. By aggregating key financial metrics, technical indicators, peer comparison, and market sentiment—leveraging proprietary analytical models—we have built an expert view on this New Zealand consumer staples play. So, why might Fonterra Shareholders' Fund stock once again become a strategic entry point into the essential food and agribusiness sector as we head into 2025?

Recent Performance and Market Context

Fonterra Shareholders' Fund (FSF), trading on the NZX, has charted an impressive recovery and new momentum, positioning itself among the top performers on the local market. As of 30 May 2025, the stock has delivered a stellar +58.10% return over the past year, with a six-month gain of +12.84% and +19.42% year-to-date. The current price sits at NZ$6.15, notably close to its 52-week high of NZ$6.43, having rebounded sharply from lows of NZ$3.85 over the period.

Several positive events have driven this rerating:

• Earnings Surprise: Fonterra’s Q3 FY25 saw normalised profit after tax up 11% year-on-year, outpacing expectations, with normalised EPS up 13%.
• Strategic Refocus: Announcements regarding a global consumer business divestment (evaluating both sale and IPO options), with clear intent to focus on higher-margin B2B ingredients and foodservice, have been met with investor approval.
• Strong Dividends: FSF’s forward dividend yield stands at an attractive 7.18%—well above both the sector and wider NZ market average.
• Sector Tailwinds: Macroeconomic drivers—including robust global dairy demand, recovering Chinese consumption, and a stable forecasted $NZ10.00/kgMS farmgate milk price—continue to underpin revenue sustainability.

The broader agricultural staples and food ingredients sector has seen renewed earnings upgrades, partly due to pricing power, and has become a safe-haven play amid persistent geopolitical volatility. Within this environment, Fonterra’s market leadership has become a defining advantage.

Technical Analysis

While some short-term technical indicators are currently flashing caution, the setup for a potential bullish reversal is emerging:

• Relative Strength Index (RSI): At 43.67, RSI is just below neutral, suggesting the stock is approaching oversold levels and may be primed for a technical bounce—confirmed by a Williams %R of -80.
• Moving Averages: The 200-day moving average (MA) at NZ$6.03 has acted as robust technical support, with the current price now holding above this critical level. Though 5-, 20-, and 50-day moving averages cluster near NZ$6.19 (momentarily acting as resistance due to recent consolidation), a sustained break could signify renewed upward momentum.
• MACD and Momentum: The MACD at neutral (0.000) implies sellers’ exhaustion may be impending.
• Support and Resistance: Key support at NZ$6.03, and a clear resistance at NZ$6.43 (52-week high). A break above resistance on heightened volume would typically trigger new institutional interest.
• Market Structure: The low five-year beta figure (0.07) indicates very low volatility, likely providing an attractive risk-adjusted entry for portfolio stabilisation.

Although short-term technicals signal consolidation, the overall technical landscape seems to be setting up for a bullish phase, particularly given the recent fundamental catalysts.

Fundamental Analysis

FSF’s underlying financials provide a reassuring value foundation:

• Earnings Power: FY25 year-to-date normalised profit after tax is up 11%, with a corresponding 13% EPS increase, and guidance reaffirmed in the attractive 65-75c/share range.
• Revenue Growth: Revenue over the trailing twelve months reached NZ$228 million, with quarterly revenue up a substantial +83.3%.
• Attractive Valuation: The stock is trading at a TTM P/E ratio of just 8.19 and Price/Book at 1.23—suggesting both undervaluation and margin of safety relative to peers and historical averages.
• Cash Generation: Operational cash flow of NZ$59 million, and a return on assets at a stellar 31.6%, speak to capital efficiency and robust shareholder returns.
• High-Yield Dividends: Annual forward dividend persists at NZ$0.44 per unit (yielding 7.18%). This is sustainable in light of both cash generation and management’s stated commitment to capital returns.
• Market Leadership: Fonterra remains a true global leader in B2B dairy, exporting to 100+ countries from a diversified base (NZ, Australia, Brazil, Chile), and controlling household names like Anchor and Mainland.

This combination of strong growth, sustainable yield, underappreciated valuation, and industry dominance forms a compelling backdrop for upward rerating, while the shift towards value-adding B2B businesses is likely to lift margins and future earnings resilience.

Volume and Liquidity

• Trading Volume: The average 3-month daily volume is nearly 73,000 shares, indicating active market participation and no liquidity constraints—ample, indeed, for both institutional and well-positioned retail investors seeking scale.
• Market Cap: With a market capitalisation of NZ$660.6 million, FSF remains a significant component of the NZX, garnering analyst attention and supporting dynamic valuation resets.
• Float and Structure: The closed-end fund structure and relatively modest institutional participation (0.78%) reinforce the potential for valuation upgrades as broader investor bases re-rate its profile.

Increased trading volume alongside positive newsflow is a classic precursor to sustained rallies—especially as technical resistance levels are challenged.

Catalysts and Positive Outlook

A series of upcoming or unfolding catalysts are set to unlock further value:

• Divestment and Capital Return: The planned sale/IPO of the global consumer business is expected to eventuate in a significant capital return to unitholders, reinforcing FSF’s income proposition.
• Product Mix Optimisation: The company’s renewed strategic focus on high-margin ingredients and foodservice aligns perfectly with prevailing consumption trends and offers defensive growth.
• Strong Operating Environment: Steady farmgate milk price forecasts, together with global demand stability in staple dairy categories, create an environment primed for earnings consistency.
• ESG and Resilience: Fonterra’s leadership in sustainability practices and transparent governance continues to appeal to institutional funds, especially ESG-oriented mandates.
• Consensus Upgrades: The analyst consensus target is NZ$6.14, but a 30% uplift scenario puts fundamental fair value closer to NZ$8.00—offering open-ended upside if performance continues to surprise positively.
• Sector and Policy Tailwinds: With NZ dairy product demand supported by population growth and interstate trade agreements (notably in Asian markets), Fonterra remains well-insulated from domestic economic cycles.

With its structural strengths and multiple value catalysts, FSF sits at the confluence of defensive yield and growth optionality.

Investment Strategies

Short-Term Entry:

• Entering near the current price (NZ$6.15), with the 200-day MA (NZ$6.03) offering downside protection, could allow for technical mean reversion especially as the next phase in the B2B pivot is announced.
• Possible near-term breakout if volume pushes the price above NZ$6.43 (key resistance).

Medium-Term Hold:

• Awaiting the completion or concrete announcement of the global consumer business divestment offers clear upside, as a capital return could materially reset the valuation baseline.
• Yield-focused investors may wish to capture the next dividend (ex-dividend 26 March 2025), as performance guidance underpins payoff reliability.

Long-Term Positioning:

• FSF offers exposure to a resilient food and agribusiness leader, benefiting from global population growth and demand for high-quality dairy proteins.
• The ongoing shift to value-adding segments should enhance earnings quality and reduce cyclicality, making FSF an appealing portfolio anchor for those seeking stable returns with moderate risk (extremely low beta).

In sum, technical consolidation at support, robust fundamentals, and imminent catalysts together create a constructive setup for new long positions.

Is it the Right Time to Buy Fonterra Shareholders' Fund?

At this inflection point, Fonterra Shareholders' Fund combines multiple factors that justify a renewed sense of optimism:

• Outstanding Recent Performance: A year-on-year surge of +58%, with consistent dividend payouts and operating gains.
• Robust Financials: Healthy earnings growth, strong free cash flow, and exceptional return on assets support value retention and future growth.
• Attractive Valuation Metrics: Low P/E and Price/Book ratios offer a margin of safety amidst sector peers.
• Strong Dividend Yield: At 7.18%, the income proposition is more compelling than most domestic equities.
• Strategic Realignment and Imminent Catalysts: B2B focus and expected capital returns offer both tactical and strategic prompts for accumulation.
• Market Structure: Low volatility, high liquidity, and solid technical support deliver a favourable risk/reward balance.

While short-term technicals indicate some consolidation, the medium- and long-term prospects for FSF are clearly geared towards value creation. For investors seeking income, defensive qualities, and upside linked to both sector growth and capital events, Fonterra Shareholders' Fund appears to represent an excellent opportunity, particularly given the evolving dividend and strategic landscape. The stock’s fundamentals justify renewed interest, as it may be entering a new bullish phase. With its current positioning, FSF invites serious consideration as a strategic allocation within a diversified NZ equities portfolio.

With its blend of defensive yield, operational momentum, and looming catalysts, Fonterra Shareholders’ Fund offers precisely the kind of resilient yet opportunistic exposure that investors increasingly seek in today’s dynamic market environment.

How to buy Fonterra Shareholders' Fund stock in New Zealand?

Buying Fonterra Shareholders' Fund (FSF) shares online has never been easier or more secure for New Zealand investors. Using a regulated broker, you can own FSF directly (spot/cash purchase) or speculate on its price movements using Contracts for Difference (CFDs), all from the comfort of your home. Spot buying means you physically own the shares, while CFDs allow you to trade on price changes with leverage. Both approaches offer flexibility to suit different strategies and risk appetites. A detailed comparison of the best regulated brokers for FSF in New Zealand is provided further down this page.

Spot buying (Cash purchase)

A cash or “spot” purchase of Fonterra Shareholders' Fund involves buying actual shares on the New Zealand Exchange (NZX), making you a direct shareholder with rights to dividends and company updates. Most NZ brokers charge a fixed commission per trade, typically around NZ$5–15, depending on the platform.

Example

Suppose the FSF share price is NZ$6.15. With a NZ$1,000 investment and an average NZ$5 broker commission:
- Net amount available for shares: NZ$995
- Shares you can buy: NZ$995 ÷ NZ$6.15 ≈ 161 shares

Gain scenario:
If the share price rises by 10%, each share is worth NZ$6.77. Your holding rises to 161 × NZ$6.77 = NZ$1,090.

Result: +NZ$90 gross gain (+9%) after fees, plus any dividend income.

Trading via CFD

CFD (Contract for Difference) trading lets you speculate on FSF share price movements without owning the underlying shares. You can also use leverage, which increases your exposure but comes with higher risk. CFD fees include the trading spread (the difference between buy/sell prices) and overnight financing charges if you hold positions for several days.

Example

You open a CFD position on FSF with NZ$1,000 and use 5x leverage.
- Total market exposure: NZ$5,000

Gain scenario:
If the FSF price rises by 8%, your position gains 8% × 5 = 40%.

Result: +NZ$400 gain on a NZ$1,000 investment (excludes spread/financing costs).

Final advice

Before investing in FSF shares, it’s essential to compare brokers’ fees, platforms, and customer support. Your choice between cash buying or CFD trading should reflect your investment goals, risk tolerance, and whether you prefer direct ownership or more dynamic (but riskier) trading strategies. For a tailored overview of the top New Zealand brokers, see our comparator further down the page. Investing can be straightforward and rewarding when you select the right tools and approach for your objectives.

Our 7 tips for buying Fonterra Shareholders' Fund stock

The latest news about the Fonterra Shareholders' Fund

Fonterra Shareholders' Fund maintains robust momentum with a 58% annual gain and 19.4% YTD growth. The FSF unit price has risen sharply over the past year, closing at NZ$6.15 and registering a 58.1% increase in the last twelve months and 19.4% year-to-date. This performance stands out within the New Zealand equity landscape. The current market capitalisation rests at NZ$660.6 million, underscoring the scale and resilience of FSF amid volatility-driven global markets. The 52-week trading range—from NZ$3.85 to NZ$6.43—reflects significant investor confidence and positions FSF near its annual highs, further underpinned by very low five-year beta (0.07), pointing to exceptional stability for local investors.

Fonterra’s Q3 FY25 results deliver double-digit profit and EPS growth, exceeding market expectations. Announced within the last week, Fonterra Co-operative Group reported normalised after-tax profit of NZ$1,158 million for the third quarter, up 11% year-on-year, with normalised earnings per share growing 13% to 70 cents. The co-operative now targets FY25 EPS of 65–75 cents, signaling strong underlying business performance and sustained profitability. Quarterly revenue growth was particularly remarkable, up 83%, with operating cash flow reaching NZ$59 million, and a best-in-class return on assets of 31.63%. These strong fundamentals underpin the fund’s ability to support distributions and reinforce local investor sentiment.

A forward dividend yield above 7% continues to make FSF highly attractive for income-focused New Zealand investors. FSF stands out in the New Zealand market with a 7.18% forward dividend yield (7.67% trailing), reflecting robust cash-generating abilities and prudent capital management. The annual forward dividend is NZ$0.44, and the last ex-dividend date was March 26, 2025. This high, sustainable yield is enhanced by Fonterra’s reaffirmed intentions to return significant capital to shareholders following the planned divestment of its global consumer business, offering further upside potential and underscoring management’s commitment to shareholder value in the local context.

Fonterra’s strategic refocus on B2B and ingredients enhances profitability and long-term prospects for FSF holders. Over the past week, Fonterra confirmed its global consumer business divestment plan—either via trade sale or IPO—anchoring its strategy on higher-margin B2B and foodservice channels. This refocusing aligns well with the cooperative’s competitive advantages, as it remains a global dairy leader based in New Zealand with a portfolio of trusted local brands (Anchor, Mainland, Kapiti, Perfect Italiano). The shift is widely viewed as constructive by market participants, with expectations of further profit improvement and a targeted return on capital of 10–12%. The strategic transition is optimistically received in the local market, mitigating ongoing risks from global demand or commodity price fluctuations.

Stable farmgate milk prices and a favourable demand outlook reinforce the operating stability of Fonterra and FSF. For the current 2024/25 and upcoming 2025/26 seasons, Fonterra has set a farmgate milk price forecast of NZ$10.00 per kgMS (within a NZ$8.00–11.00 band), supporting New Zealand dairy farmers and ensuring continued supply stability. Demand for Fonterra’s reference products remains robust, especially in key foodservice segments, despite global uncertainties. These domestic and international factors provide a reliable revenue base for Fonterra’s processing operations—critical for FSF’s distribution capacity and the ongoing resilience of its payout profile for NZ-based investors.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.