BUZZ — Mercury NZ trims losses after Morningstar highlights resilient Q1 performance

* Mercury NZ shares fell as much as 1.3% to NZ$6.69 before trimming losses, and were last down 0.6% in late-afternoon Wellington trade * Electricity retailer posts Q1 trading margin up 19% YoY, as new wind and geothermal supply offset weak hydro output from dry conditions * Morningstar says one of the driest quarters on record cut hydro generation 24%, or 332 gigawatt-hours, but total generation slipped only 1% * Investment research firm adds, derivative gains helped results, though underlying performance was solid and highlighted the value of a diversified generation fleet * Says lake storage is about 25% below average and likely El Niño-driven low rainfall creates hydro output headwinds for fiscal 2027 * "We leave our forecasts largely unchanged" and maintains its NZ$6.8 fair value estimate - Morningstar * Stock up 4% YTD (Reporting by Kumar Tanishk in Bengaluru) ((mailto:Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk )