The draft decision of the Australian Energy Regulator (AER) lowered the average post-tax nominal weighted average cost of capital (WACC) to apply over 2022-27 to 4.22%. This was in-line with UBS estimate and considered already factored into the price.
The broker considers the result reflects a solid outcome for AusNet Services’ second largest asset (ELEC-T), given how closely the draft decision reflects the initial proposal. The Neutral rating and $1.80 target are retained.
Target price is $1.80.Current Price is $1.77. Difference: $0.03 – (brackets indicate current price is over target). If AST meets the UBS target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).