While the additional costs incurred by
-Transurban will contribute an extra
-Brokers prefer the contribution over protracted legal proceedings
-A minimal impact upon dividends is expected
-A steady recovery in traffic volumes is underway
The company's contribution will be funded through corporate liquidity as well as from previously flagged capital releases. Management expects the costs to be capitalised and will not impact free cash flow.
The new completion date is 15-18 months later than anticipated and is now set for the December quarter of 2025.
While the dollar amount was higher than brokers expected, they unanimously agree the transaction is preferable to expensive court action and the agreement removes a major uncertainty for the company.
Jarden notes the additional cost is at the high-end of consensus expectations (
As a result the broker, not one of the seven brokers monitored daily on the FNArena database, raises its target price to
Morgans points out a key value driver for the project originally was the ten year
The broker lowers its target price to
Morgan Stanley estimates contributions of around -
Citi believes lower debt costs and a higher proportion of debt in the project helps lower the weighted average cost of capital (WACC) and offsets the cost increases.
The analyst highlights potential longer-term pricing and volume risk from recent concerns around toll affordability and the potential for work from home to be ongoing and maintains a Neutral rating. The target price falls to
Weekly traffic performance
Citi points out traffic continues to see a steady recovery in
Macquarie notes traffic has performed right on expectation. With a recovery in airport-linked roads in
The broker reiterates that the group is a quality defensive exposure with a growing and attractive yield and maintains its Outperform rating, while lowering its target price to
FNArena's database has seven broker ratings with five Buy and two Neutral ratings, and a consensus target price of
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