Transurban Earnings: Big Toll Uplifts Buoy Fiscal 2024

Wide-moat-rated Transurban’s fiscal 2024 proportional EBITDA increased 7% to AUD 2.63 billion, which is in line with our expectations. The result benefitted from outsize toll uplifts as most tolls are Consumer Price Index-linked, with modest improvement in traffic volumes and good cost control. EBITDA margin increased 70 basis points to 73.1%. Fiscal 2025 distribution guidance is for AUD 0.65 per security, and we lift our forecast by AUD 1 cent to bring it in line. We leave our earnings forecasts largely unchanged and lift our fair value estimate by 2% to AUD 12.80 per security, mainly on the time value of money. At current prices, the stock screens as fairly valued.