Citi, Morningstar impressed with Australia's Aurizon results but still see headwinds

Aurizon Holdings

16/02/2026 20:38

** Citi and Morningstar say Aurizon Holdings' AZJ.AX 1H26 results were solid, with co posting recovery in coal segment
** Rail freight operator on Monday logged a 16% jump in HY NPAT and extended its buyback by A$100 million ($70.74 million); shares jumped 7%

** Citi, however, is less optimistic looking forward, sees reversal in second-half coal profitability with expected lower yields and flat FY26 unit costs

** Morningstar still sees headwinds in coal haulage, given weak operating conditions and "significant recontracting to come"

** Still, given results, Citi makes modest EBIT revisions for FY26-28 and hikes dividend payout to 90%; Morningstar raises FY26 earnings forecasts but leaves longer-term outlook unchanged

** Citi "neutral" on shares but hikes price target to A$4.00/share, Morningstar maintains A$4.40 per share target, says it remains undervalued
** Citi says co's intention to not divest its Network segment was widely anticipated

** YTD, shares up 5.2%

($1 = 1.4136 Australian dollars)

 (Reporting by Nichiket Sunil in Bengaluru; Editing by Lisa Shumaker)

 ((Nichiket.Sunil@thomsonreuters.com))