J.P.Morgan ASIA PACIFIC EQUITY RESEARCH: AUSTRALIA FIRST TO MARKET

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J.P.Morgan ASIA PACIFIC EQUITY RESEARCH: AUSTRALIA FIRST TO MARKET

Asia Pacific Equity Research

Australia First to Market 16 June 2026

Top Stories

| Transurban (Richard Jones, CFA) (TCL AU, UW)

Traffic impacted by Middle East conflict, downgrade to Underweight

We have updated our forecasts for Transurban to reflect the: 1) sale of the A25 and 2) our lowered traffic forecasts following the

release of May traffic data, which has shown a continuation of negative underlying traffic trends from the recent higher oil

prices. Despite the slowdown in underlying traffic volumes Transurban has outperformed the ASX industrials total return by

~7% since April. TCL offers defensive revenue but trades at a decent premium to our revised $13.75 (-25¢) Price Target. We

expect TCL to pay out 69¢ in distribution in FY26 in line with its guidance, but now forecast a FCF payout of ~103% post our

earnings changes. This will restrict DPS growth in FY27 as we assume a reversion to 100% FCF payout. TCL is trading on a

~4.5% distribution yield which is now below the 10 year bond (Figure 1 - vs 5 year average of 70bp premium) and is trading at

an elevated EV/EBITDA multiple (Figure 2). As a result of its elevated multiples, impacted traffic and ~10% premium to our

Price Target, we downgrade to Underweight.

Australia and New Zealand: Weekly Prospects (Ben K Jarman)

After three consecutive hikes into a slowing economy and narrow inflation impulse, there is little need for further RBA

tightening. The RBA’s commentary had of course been clear on this a month ago, flagging a period of stability. We think this

week’s meeting will be a relatively straightforward one with broad support for rates remaining on hold, though with the reminder