Transurban Group (TCL.AX): NSW toll reform broadly value neutral, with small longer term free cash pressure. Neutral

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Transurban Group (TCL.AX): NSW toll reform broadly value neutral, with small longer term free cash pressure. Neutral

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03 Aug 2026 01:55:06 ET │ 16 pages

Transurban Group (TCL.AX)

NSW toll reform broadly value neutral, with small longer term free cash

pressure. Neutral

CITI'S TAKE Neutral

Price (31 Jul 26 16:00) A$14.81 We view the finalisation of the NSW Toll Reform as the completion of a

Target price A$15.60↓ major potential overhang for Transurban (TCL), at a broadly value neutral

outcome. The complex package preserves the NPV of existing contracts from A$15.80

despite lower toll revenues, through early promissory note monetisation Expected share price return 5.3%

($0.6 billion total in 2028), government-funded widening of the M7-M2 Expected dividend yield 4.8%

corridor, and structured equalisation payments. Crucially, FY26 Expected total return 10.1%

distribution guidance remains unaffected, protecting the stock's Market Cap A$46,210M

defensive yield appeal. June traffic growth of 3.8% (2.4% ex-Westgate

US$32,453M Tunnel) demonstrates solid underlying demand, but flat performance at

Melbourne's West Gate Tunnel since February 2026 and persistent

macroeconomic watchpoints suggest a balanced outlook. At current

valuations, the stock fairly reflects these developments, supporting our Suraj Nebhani, CFAAC

Neutral stance as we monitor the timing of cash flows and the execution +61-2-8225-4829

of the M7-M2 widening project. suraj.nebhani@citi.com

Howard Penny

NSW toll reform finalised with value neutral outcome — TCL today announced the +61-2-8225-4819

finalisation of the NSW toll reform process, which will be implemented in phases howard.penny@citi.com

starting 1 July 2027, and are subject to definitive agreements and various proposals.