Macquarie Infrastructure Group (MIG) Update

Submitted by Craig Strzelecki on 11 April, 2007 - 16:49

Macquarie Infrastructure Group (MIG) has a Neutral 1 share recommendation and a price target of $4 from market analyst UBS. The price target is their 12-month DCF and estimate of the price MIG can buy back stock. They think Macquarie Infrastructure is likely to trade at 10% discount to NAV following completion of the buyback due to structural complexity and acquisition uncertainty 3Q07 traffic data is generally poor across the portfolio largely due to adverse weather conditions during the period. Impact from road work (both +ve and -ve) continues to be a dominant theme and they expect to be ongoing over the next 12 months. Revenue growth continues to be strong and largely in-line with our expectations. MIG is now ~$415m through its current/approved buyback facility (~$1.0bn), so still plenty left in the tank. The analyst estimates the price MIG can buy its securities on market under its buyback approval from ASIC is ~$4.00, which is close to the current security price. They estimate MIG currently has ~A$1.8bn of excess cash (incl $585m for its buy-back). Cintra recently beat MIG in the bidding for Texas state highway 121 (SH 121), however Macquarie Infrastructure Group (MIG) is now looking at SH 161, LBJ Freeway and Pennsylvania Turnpike (if sale goes ahead). New acquisitions will be critical benchmarks for the market to assess the MIG model going forward.

Macquarie Infrastructure Group Limited is listed on the Australian Stock Exchange (ASX) under stock code MIG. You can view their investor website here. MIG was listed on the ASX on 16 December, 1996. Stephen Allen is the CEO for Macquarie Infrastructure Group and Mark Johnson the Chairman. Macquarie Infrastructure Group (MIG) is one of the largest developers and operators of toll roads in the world. MIG has a geographically diversified portfolio of 11 toll roads across seven countries, and a track record of successfully integrating significant, complex businesses. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MIG. Check your charts and good luck with your share trading!

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