Transurban’s 1H Results Track Our Expectations; Wide-Moat Firm Remains Fairly Valued

We maintain our AUD 10.50 per security fair value estimate for wide-moat Transurban following solid results in the firm’s fiscal first half. We’re encouraged by the firm's increase in expected distributions per security (forecast raised to AUD 51.5 cents per security for the full year from AUD 50.5 cents previously), in line with our belief continued traffic increases and positive mix shift toward large-vehicle traffic (which offers higher yields) will drive a strong 8.5% annual distribution per security CAGR to nearly AUD 0.70 in the next five years. That said, securities remain fairly valued by the market, in our opinion.