The company has announced a $420m placement to be used for repayment of the corporate debt facility, which UBS assesses removes some risk and simplifies the holding structure for the 31% stake in APRR.
The broker increases the assumed recovery in traffic on the motorway and also lowers the cost of equity assumptions. Updated disclosure and traffic trade shows a significant recovery through May.
Despite the first half being profitable, no dividend is assumed for this period. Neutral maintained. Target is raised to $6.35 from $5.55.
Sector: Transportation.
Target price is $6.35.Current Price is $6.70. Difference: ($0.35) – (brackets indicate current price is over target). If ALX meets the UBS target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
