Atlas Arteria Group (ALX.AX): Q22026 traffic update highlights resilient traffic offset by FX headwinds, Retain Neutral

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Atlas Arteria Group (ALX.AX): Q22026 traffic update highlights resilient traffic offset by FX headwinds, Retain Neutral

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28 Jul 2026 22:31:00 ET │ 15 pages

Atlas Arteria Group (ALX.AX)

Q2 2026 traffic update highlights resilient traffic offset by FX

headwinds, Retain Neutral

CITI'S TAKE Neutral

Price (28 Jul 26 16:00) A$5.07 ALX’s 2Q26 traffic growth proved resilient despite high fuel prices.

Target price A$5.10 Weakness in European concessions APRR (-3.9% YoY) and ADELAC (-

3.9% YoY) was offset by robust US performance, particularly Chicago Expected share price return 0.6%

Skyway (+4.7% YoY) and Dulles Greenway (+5.3% YoY). Skyway benefited Expected dividend yield 7.9%

from temporary nearby roadworks and further planned roadworks Expected total return 8.5%

highlight upside for 2027. However, FX headwinds dragged overall toll Market Cap A$7,369M

revenue down 8.1% YoY as offshore earnings were translated into a US$5,140M

weaker AUD. Financially, leverage is rising following a US$100m debt-

funded payment to exhaust the Skyway put option. The new A$150m

facility increases interest expenses by ~A$10m, further pressuring an

already stretched FCF payout ratio (>110%) and raising distribution Suraj Nebhani, CFAAC

sustainability concerns into FY27. We retain our Neutral rating and $5.10 +61-2-8225-4829

Target Price (fundamental value $4.80), anchored by IFM’s last bid. Key suraj.nebhani@citi.com

focus remains on post-bid operations and distribution sustainability. Howard Penny

+61-2-8225-4819

Traffic growth resilient but FX headwinds to toll revenue — Traffic growth was howard.penny@citi.com

broadly resilient in 2Q 2026 despite higher fuel prices with weakness in APRR (-3.9% Akshit Batra

YoY) and ADELAC (-3.9% YoY), offset by strong growth at US roads - Chicago