Atlas Arteria: A Weak Start to the Year but Longer-Term View Is Intact

Narrow-moat Atlas Arteria’s first-quarter traffic results were relatively weak. Despite the benefit of an extra day in February, weighted average traffic growth was negative 0.7% compared with the previous corresponding period. Revenue growth was 2.9%. Revenue and traffic are tracking below our full-year forecasts, primarily due to one-offs like farmers’ strikes and severe snowstorms. We downgrade our 2024 expectations slightly, but longer-term forecasts are largely unchanged. We maintain our AUD 5.60 per security fair value estimate and consider the stock fairly valued.