Transurban Group: Inflation hedge, but near-term catalysts lacking. Reiterate Neutral

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Transurban Group: Inflation hedge, but near-term catalysts lacking. Reiterate Neutral

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Transurban Group

Inflation hedge, but near-term catalysts

lacking. Reiterate Neutral

Reiterate Rating: NEUTRAL | PO: 14.60 AUD | Price: 14.60 AUD

Inflation hedge. Interest rate sensitivity lags 15 May 2026

We view TCL as a strong inflation hedge, supported by largely CPI‑linked toll escalators Equity

and floor protections (c.57% of EBITDA benefits from >4% floors). This should support

strong earnings protection, with revenue indexation largely flowing through to

Key Changesprofitability and further supported by ongoing cost discipline. Near-term interest rate

risk appears limited, with c.89% of debt hedged and an average duration of c.6.9 years. (A$) Previous Current

Resilient earnings. Traffic more linked to GSP than oil. Price Obj. 14.85 14.60

2026E Rev (m) 3,997.8 4,010.9

Traffic remains defensive in a softer macro environment, with volumes more correlated

2027E Rev (m) 4,298.8 3,983.2

to GSP than fuel prices. Fuel risk exists, but likely only if prices stay elevated or rationing

2028E Rev (m) 4,145.1 4,228.8

is introduced. We lower our FCF expectations by 3-4% and modestly trim Sydney and

2026E EPS 0.07 0.42

Melbourne ADT, but raise Brisbane and North America ADT. We forecast North America

2027E EPS 0.17 0.48

EBITDA to grow c.11% CAGR (FY25-28E) on dynamic pricing and capacity adds. PO

2028E EPS 0.24 0.56

lowered to A$14.60 (from A$14.85) on lower group FCF estimates and updated NPVGO

assumptions (we now use steady-state FCF assumptions). US$ ADR increases from

Lara Tufegdzic >>

US$9.75 to US$10.50 due f/x. Research Analyst

Neutral rating. Strong quality but a lack of catalysts Merrill+61 2 9226Lynch5784(Australia)