Five stock picks for 2026

The New Zealand Herald has had a longstanding annual stock-picking game whereby they ask local wealth management firms to nominate five NZX companies they think will do well over the calendar year ahead. 

The format has changed slightly over recent years – participants to the competition have been asked to pick four NZX stocks and one international stock for 2026, following 2025 where participants could pick five companies from any region around the globe.  

The competition poses an interesting challenge, and highlights what various firms are expecting to see from companies over the short-term. After a strong showing in 2024, our five 2025 picks struggled with two positive performers over the calendar year (Visa and Amazon) and three decliners (Summerset was slightly down, while Zoetis and Novo Nordisk both fell more than 20% each). 

That said, readers should also note that this is only a game and that constructing portfolios with sufficient diversification across various industries, regions and asset classes is extremely important when aiming to build long-term wealth. To illustrate, Zoetis and Novo Nordisk were completely outshone by other companies alongside them in our model portfolios, where stocks like Alphabet and ASML delivered more than 50% growth. With the disclaimer out of the way, let’s see which five stocks our analysts expect to shine over 2026. 

Top picks for 2026

The Craigs investment philosophy is built on a strong preference for long-term investments in quality businesses (versus short-term ‘punts’ in speculative, unproven investments). We believe companies with proven management, competitive advantages, pricing power, low debt levels and healthy growth options should perform well over time. While many companies across the globe tick these boxes for us, the four New Zealand companies we expect to perform strongly over 2026 are Summerset, Freightways, EBOS Group and Mercury Energy. Our international stock to watch is Schneider Electric.  

Our five picks for 2026 are:

1. Summerset
2. Freightways
3. EBOS Group
4. Mercury Energy
5. Schneider Electric

Let’s delve into the rationale for choosing these quality companies over the others on our radar, and why the start of 2026 may offer an attractive entry-point for these great businesses.

Summerset

The retirement sector has endured a severe valuation de-rating since late 2021, chiefly due to rising interest rates and its flow on effects to house prices and sales volumes, which has been further compounded by a supply glut in the retirement village sector itself. With the RBNZ’s interest rate cuts underpinning a recovery in housing market activity, and the number of new retirement villages being built reducing rapidly, the demand-supply balance in the sector is now improving.  

Despite strong balance sheets and improved trading in recent months, valuations are still c.30-50% below historic average, and we think the sector is poised to deliver much improved returns over coming years. 

While we think all three listed retirement village operators (Summerset, Ryman, Oceania) will benefit from the cyclical upswing underway, Summerset is our top pick. Summerset has been able to continue to grow its portfolio, earnings and NTA (net tangible assets) at a much faster rate than peers over the recent downturn, underpinned by its development model, and we think this will continue. Cashflows – a focus for investors – should also improve significantly as unsold inventory levels reduce and as Summerset’s relatively young portfolio matures.  

Freightways

Freightways (watch our video with their CEO from 2025) offers high quality exposure to a cyclical recovery in the NZ economy. The company has strong momentum, with its most recent trading update ahead of market expectations, and we expect volume growth to pick up as consumer spending recovers. Freightways’ share price has risen strongly over the past year, but this re-rating has largely been supported by earnings growth, and valuation remains attractive in our view. 

EBOS Group

EBOS Group is an outstanding business which has fallen out of favour since the company provided disappointing FY26 guidance in August, as the company’s costs were higher than expected. We think these issues are largely one-off, and FY27 will see EBOS Group return to more typical growth rates. With EBOS Group shares trading at just 18x forward PE (which is a discount to its long-term average), we see potential for the shares to perform well over 2026 ahead as investor visibility of a pick-up in growth improves. 

Mercury Energy

Amongst the more defensive sectors of the market, we have a preference for our ‘gentailers’ (short for ‘generator-retailers’) as they offer both a reasonable current yield and above average earnings growth potential as New Zealand continues its electrification journey. Mercury is our preferred pick from the gentailers, with a generation pipeline that is set to underpin above sector average dividend and earnings growth over the medium term. The company also has a strong balance sheet able to fund this growth.  

Schneider Electric

Schneider Electric is a global leader in energy management and industrial automation. The company is benefiting from long-term trends such as rising electrification, digitalisation, and the reshoring of manufacturing that will support higher revenue growth in the years ahead. Recent acquisitions have expanded its digital capabilities, combining expertise in power safety and control with leading software solutions that help customers in sectors such as power grids and data centres improve energy efficiency and reduce costs. Software and services now represent 20% of total revenue, growing at a double-digit pace and driving a shift toward more recurring revenue. These digital capabilities are expected to strengthen Schneider Electric’s competitive advantages and support market share gains over time. 

The year ahead will hold its own unique surprises, opportunities and curve-balls, and we look forward to seeing how these five quality companies will navigate the investment waters of 2026.  

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Disclaimer – It’s a game

Readers should recognise the results of the Brokers’ Picks are skewed by some features of the game. The figures exclude brokers’ fees. Percentage changes are total shareholder return (share price performance and dividends). Brokers are asked to choose the securities that will give the best short-term performance. If they had been asked to choose, for example, a five-year term, the results might be different. The survey does not allow brokers to review choices during the year. The survey implies a one-size-fits-all approach. It takes no account of individual circumstances such as an investor’s appetite for risk, needs for income or tax circumstances. The views expressed do not constitute personalised financial advice and are not directed at any person. Some shares picked may include shares held by the company’s directors and staff. Finally, past performance is no guarantee of future performance.

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