TCL.AX · ASX · Industrials

Transurban Group

Also onShortfallConsensus DriftCrosscheck

Implied value per share

AUD -1.74

Market price

AUD 13.26

Implied upside

-113.1%

5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

Current EV/EBITDA of 25.7x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

Value Per Share

Perpetuity growth

AUD -1.74-113.1%

Exit multiple

AUD 4.22-68.1%

Market price

AUD 13.26

Same forecast, different terminal treatment. Percentages vs price.

Assumptions

Discount rate (WACC)8.01%Growth after the forecast2.50%Exit EV/EBITDA20.0xTax rate0.79%Capex, % of revenue22.56%Depreciation, % of revenue27.90%Working capital, % of revenue growth0.00%

Forecast Cashflows

Reporting currency (AUD). Outflows negative.

Nominal FCFFDiscounted to todayAUD

Line	FY27	FY28	FY29	FY30	FY31	CAGR
Revenue	AUD 3.8bn	AUD 3.7bn	AUD 3.6bn	AUD 3.6bn	AUD 3.5bn	-2.1%
EBIT	AUD 1.0bn	AUD 991.4m	AUD 970.1m	AUD 949.3m	AUD 928.9m	-2.1%
NOPAT	AUD 1.0bn	AUD 983.5m	AUD 962.4m	AUD 941.8m	AUD 921.6m	-2.1%
Add depreciation & amortisation	AUD 1.1bn	AUD 1.0bn	AUD 1.0bn	AUD 996.4m	AUD 975.1m	-2.1%
Less capital expenditure	AUD -860.0m	AUD -841.5m	AUD -823.4m	AUD -805.8m	AUD -788.5m	-2.1%
Less increase in working capital	AUD 0.00	AUD 0.00	AUD 0.00	AUD 0.00	AUD 0.00	-
Free cashflow to firm	AUD 1.2bn	AUD 1.2bn	AUD 1.2bn	AUD 1.1bn	AUD 1.1bn	-2.1%
Discount factor	0.9622	0.8909	0.8248	0.7636	0.7070	-
Present value	AUD 1.2bn	AUD 1.1bn	AUD 954.5m	AUD 864.8m	AUD 783.5m	-9.4%
Present Value Of The Forecast	AUD 4.8bn

Discount Rate

Source shown per component. All overridable above.

Risk-free rate	5.35%	Australian Government 10-year (RBA F2)
Equity risk premium	6.00%	Market assumption
Beta	0.668	Reported 0.505, pulled toward 1.0 (Blume)
Cost of equity	9.36%	Risk-free + beta x equity risk premium
Cost of debt	5.35%	Floored at the risk-free rate (implied cost of debt was lower)
Market capitalisation	AUD 41.4bn	66.7% of capital
Total debt	AUD 20.6bn	33.3% of capital, book value as a proxy
Tax rate	0.8%	Effective, capped at statutory
WACC	8.01%	E/V x Re + D/V x Rd x (1 - t)

Terminal Value

Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

Perpetuity growth at 2.50%

Value per shareAUD -1.74

63% of EV

Forecast FCFF, final year: AUD 1.1bn
Capex at depreciation, working capital in reinvestment: AUD 921.6m
Less reinvestment at g/ROIC (31.2% of NOPAT): AUD -287.6m
Capitalised: AUD 633.9m
ROIC (WACC floor): 8.0%

Terminal value, undiscounted: AUD 11.8bn
Terminal value, discounted: AUD 8.3bn
Enterprise value: AUD 13.2bn
Less net debt: AUD 18.6bn
Equity value: AUD -5.4bn

Exit at 20.0x EBITDA

Value per shareAUD 4.22

85% of EV

Terminal value, undiscounted: AUD 38.1bn
Terminal value, discounted: AUD 26.9bn
Enterprise value: AUD 31.7bn
Less net debt: AUD 18.6bn
Equity value: AUD 13.2bn

Sensitivity

Value per share (AUD) by discount rate and long-run growth.

Long-run growth
Discount rate	1.50%	2.00%	2.50%	3.00%	3.50%
6.01%	-0.51	-0.49	-0.47	-0.45	-0.43
7.01%	-1.23	-1.21	-1.19	-1.18	-1.16
8.01%	-1.77	-1.75	-1.74	-1.73	-1.71
9.01%	-2.19	-2.18	-2.17	-2.16	-2.14
10.01%	-2.53	-2.52	-2.51	-2.50	-2.49

Outlined: this model. Green text: above today's price of 13.26. Shading: distance from this model's own value.

Priced In

What each input would have to be to justify the current price, one at a time.

Input	Model	Implied	Gap
Revenue growth, every year	-2.1%	37.6%	+39.7pp
Discount rate	8.0%	2.9%	-5.1pp

Download as Excel

Live formulas, not pasted numbers - edit a driver and the workbook reprices.

Yahoo Finance and RBA data. General information, not advice. Methodology.