Transurban Traffic impacted by Middle East conflict, downgrade to Underweight

Research evidence excerpt

Transurban Traffic impacted by Middle East conflict, downgrade to Underweight

J P M O R G A N Asia Pacific Equity Research

15 June 2026

Transurban ▼Underweight

Previous: Neutral

Traffic impacted by Middle East conflict, downgrade to TCL.AX, TCL AU

Price (15 Jun 26):A$15.35

Underweight ▼Price Target (Jun-27):A$13.75

Prior (Feb-27):A$14.00

We have updated our forecasts for Transurban to reflect the: 1) sale of the A25 and Australia

2) our lowered traffic forecasts following the release of May traffic data, which has

Australian REITs

shown a continuation of negative underlying traffic trends from the recent higher

oil prices. Despite the slowdown in underlying traffic volumes Transurban has Richard Jones, CFA AC

outperformed the ASX industrials total return by ~7% since April. TCL offers (61-3) 9633-4038

richard.b.jones@jpmorgan.com

defensive revenue but trades at a decent premium to our revised $13.75 (-25¢)

Adam West

Price Target. We expect TCL to pay out 69¢ in distribution in FY26 in line with (61-2) 9003-8010

its guidance, but now forecast a FCF payout of ~103% post our earnings changes. adam.west@jpmorgan.com

This will restrict DPS growth in FY27 as we assume a reversion to 100% FCF Connor Eldridge

payout. TCL is trading on a ~4.5% distribution yield which is now below the 10 (61-2) 9003-6415

year bond (Figure 1 - vs 5 year average of 70bp premium) and is trading at an connor.eldridge@jpmorgan.com

elevated EV/EBITDA multiple (Figure 2). As a result of its elevated multiples, J.P. Morgan Securities Australia Limited

impacted traffic and ~10% premium to our Price Target, we downgrade to

Underweight. Key Changes (FYE Jun)

Prev Cur Δ

• Traffic Volumes: We have updated our traffic forecasts to reflect the Adj.Adj. EPSEPS -- 26E27E (A$)(A$) 0.150.26 0.130.24 -14.6%-8.9%