Macquarie notes pressure building around the dividend over the last 24 months reflecting the low-interest rate environment. The broker believes Spark Infrastructure Group is at the bottom of its dividend cutting cycle.
A partial win around a tax matter will add to its cash flow, highlights the broker, along with a potential rule change around Transgrid and a more moderate final VPN decision.
Macquarie maintains its Outperform rating with the target price rising to $2.42 from $2.28.
Target price is $2.42.Current Price is $2.08. Difference: $0.34 – (brackets indicate current price is over target). If SKI meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).