Citi initiates coverage on Australia's Atlas Arteria with "buy"

Atlas Arteria

19/11/2024 21:39

** Citi initiates coverage on international toll road
operator Atlas Arteria  ALX.AX  with "Buy" rating at price
target of A$5.80
    ** Brokerage says ALX is attractive due to its 8% dividend
per share yield and projected strong free cash growth of 14-15%
in FY24-FY25
    ** Citi considers the stock undervalued, as it's priced at
an implied 5-7x EV/EBITDA, a ratio comparing the company's value
including debt to its cash earnings
    ** Citi sees potential value increase from ending profit
distribution restrictions at Dulles Greenway in the U.S. and a
possible company acquisition
    ** Brokerage flags caution on potential additional taxes on
APRR, a French toll road in which ALX owns a ~30% stake, which
could impact profitability
    ** Stock has lost ~16.4% so far this year as of the last
close

 (Reporting by Kumar Tanishk in Bengaluru)
 ((Tanishk.Kumar@thomsonreuters.com;))