Analyst Note
| Adrian Atkins |We maintain our AUD 4.70 per share fair value estimate for narrow-moat Aurizon and continue to think the stock is attractive, despite downgrading near-term earnings forecasts on weaker than expected fiscal 2023 guidance. At the current share price, Aurizon trades on a fiscal 2023 P/E ratio of 14 and offers a mostly franked yield of 5.5%. We think dividends are defensive and should grow at an average annual rate of 7.5% in the next five years on rising earnings and a higher payout ratio.