At A$14.245 per share, Transurban Group (ASX: TCL) appears reasonably valued based on its current cash flow and distribution guidance. Transurban generated free cash of 34.8 cents per share during the first half of FY26 and maintained full-year distribution guidance of 69 cents per share. This represents a forecast cash yield of approximately 4.8% at the assessed price, with the distribution expected to be fully covered by free cash.
Proportional operating EBITDA increased by 6.4% to A$1.55 billion, while total revenue increased by 6.0% to A$2.02 billion. Group traffic increased by 3.0% during the March quarter, supported by the West Gate Tunnel and expansion of the North American network. More than 90% of revenue is linked to inflation or fixed toll increases, although the weighted average cost of Australian-dollar debt was 4.6%.
Importantly, this assessment is based mainly on Transurban’s existing toll roads, current traffic levels and FY26 distribution guidance. It does not assign significant value to additional projects or stronger future traffic growth. These may provide additional upside but remain subject to interest rates, debt costs, traffic performance, government regulation and project spending.
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