Falls in traffic and tolls on the APRR in France and the Dulles Greenway in the US in the December quarter were not as extensive as the broker feared, while still meaningful following what had been a reasonable comeback in the September quarter.
Covid-led re-lockdowns were the cause, and at this stage it appears the March quarter will be similarly weak. The broker sees downside risk to its Dulles forecasts but this does not impact on cash flow expectations, as dividends will likley be pushed out to 2024.
On the other hand, the APRR dividend might be better than forecast. The broker notes liquidty is not an issue for Atlas Arteria given conservative gearing. Neutral and $6.10 target retained.
Sector: Transportation.
Target price is $6.10.Current Price is $6.08. Difference: $0.02 – (brackets indicate current price is over target). If ALX meets the UBS target it will return approximately 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).
