Transurban: Solid Growth but a Little Below Our Expectations

Wide-moat-rated Transurban reported marginal growth in the September quarter, with groupwide traffic numbers up 1.1% on average on the same quarter last year. We slightly reduce our fiscal 2025 earnings forecasts, but the impact is immaterial to our fair value estimate, which is unchanged at AUD 12.80 per security. Transurban is fairly valued at current prices. We forecast a 4.7% revenue compound annual growth rate over the next five years, underpinned by completion of developments, mostly Consumer Price Index-linked toll increases and modest traffic volume growth.