Transurban had been doing about as well as could be expected, with COVID outbreaks and associated lockdowns largely determining mobility, crucial to a toll road operator.
And the rebound is expected, by everyone, including consensus estimates, as vaccines roll out. So no criticism there.
But the valuation remains challenged. Even if we assume the top end of historical earnings as the baseline for extrapolation, it sets a hurdle that embedded expectations (what we see as “in the price”) don’t seem able to match, to our minds.
Especially as COVID cases here in Australia chip away at the risk appetite for COVID recovery plays.
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