Transurban Group released its first quarter traffic data. For the overall portfolio, average daily traffic (ADT) decreased -29% on the previous corresponding quarter, calculates Morgans. The broker notes the decline is -25% after factoring in the commencement of tolling on the WestConnex M8/M5E in Sydney.
The traffic performance was softer than Morgans had assumed for the first half, but the analyst is optimistic of improvement in the second quarter.
The broker highlights the company’s plans to introduce equity partners into its Express Lanes. While it’s considered this will raise capital to fund future investment, it will also provide interesting proof of value.
Morgans forecast an around 37cps dividend in FY21.
The Hold rating is maintained. The target price is increased to $14.11 from $13.71.
Target price is $14.11.Current Price is $14.01. Difference: $0.10 – (brackets indicate current price is over target). If TCL meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).