Atlas Arteria Earnings: Soft Result Masked by Capital Management Initiatives

Narrow-moat-rated Atlas Arteria’s proportionate EBITDA fell 2% to AUD 676 million in first half 2024, with lower traffic at APRR and the Chicago Skyway and higher operating costs offsetting solid toll uplifts. The result was a little weaker than we expected, and we downgraded our full-year EBITDA forecast by a couple of percent. Our medium-term earnings forecasts also reduce marginally. We trim our fair value estimate by 4% to AUD 5.40 per security and consider the stock slightly undervalued.