MIG

Here is an update on the different sectors of Australian market from market analyst Macquarie Research Equities.

Record Oil - The Impact of Black Gold

Macquarie Infrastructure Group (MIG) has an Outperform recommendation with a 12 month price target of $4.10 from Australian Stockmarket analyst Macquarie Research Equities.

Macquarie Infrastructure Group (MIG) – Deal Provides Valuation Clarity

Macquarie Infrastructure Group (MIG) has a $3.55 share price target and an Outperform recommendationfrom Australian stock analyst Macquarie Research Equities.

Pennsylvania could trigger 407 refinance

Pennsylvania Turnpike (~US$12-15bn) bids due imminently:

Here is an update on the Australian infrastructure sector provided by Australian market analyst UBS.

Australian Infrastructure

Return to fundamentals on the horizon

Infrastructure & long-duration interest rate relationship broken...for now:

Macquarie Infrastructure Group (MIG) has a maintained Outperform recommendation and a $4.10 share price target from Australian sharemarket analyst Macquarie Research.

Macquarie Infrastructure Group (MIG): Traffic Figures

Macquarie Infrastructure Group (MIG) have a retained Outperform recommendation from Australian sharemarket analyst Macquarie Research Equities. Shares in Macquarie Infrastructure Group (MIG) have underperformed the broader market in recent months, and are currently down over 26% since reaching their highs in March. Late last week, the 407 reported its September quarter results, with EBITDA up 21.0% to $118m on the back of a 19.2% increase in revenue to $144.9m. MIG indicated M6 Toll reported 5.7% EBITDA growth.The analysts remain bullish on the long term outlook for MIG and believe at current prices, Macquarie Infrastructure offers excellent value to investors. The strength of the 407 result reflects the lane widening combined with seasonally stronger summer. The revenue growth of 19% is not surprising as natural growth would be 16–17%. The additional 3% comes from a high proportion of non-transponder users during the summer period. Combined with a strong cost discipline, EBITDA margins expanded to 81%. M6 Toll’s weak traffic growth was anticipated thus the EBITDA growth of 5.7% is not surprising and is consistent with the analysts expectation of 6.7% for the half. The effect of the road works is starting to diminish where EBITDA growth is likely to normalise at +10% post December. Driving the growth should be a steady rebound in traffic combined with another 50p price rise. The departure of Stephen Allen is disappointing to the extent that he has overseen the improvement in the roads operational performance, continued the asset rationalisation, and collectively bought well. The latter may be disputed, but APRR is simply a stunner (if only he had bought more), and the US assets have already realised a degree of value. John Hughes comes from a similar background with experience in both toll road acquisitions and broader asset class. There is scope for a minor upgrade to our 2007 407 EBITDA expectation of c$218m given the strength of 3Q at c$118m, although this translates into a very small change in our MIG forecasts. At a 26% discount to NPV and a 22% discount to prospective NAV, MIG is still offering excellent value to investors. The quarterly results should help to underline the inherent value in these two key assets.

Here's a Macquarie Infrastructure Group (MIG) stock tip: Australian sharemarket analyst, Macquarie Research Equities have given MIG a reiterated Buy stock recommendation and a share price target of $4.10 per share. Macquarie Infrastructure Group has reported September quarter traffic statistics which were broadly in line with their estimates. However, market appears to be more concerned about the impact of strengthening Aussie dollar, rising bond yields and credit crunch on MIG, and as a result has marked the stock down which has under-performed the All Ords by 15% since 1st July 07. They see some of market's concerns over-played and consequently reiterate their Buy rating. Support For Adjusted NAV of $4.19ps: Observed decline in global bond yields have more than offset the negative impact of rising A$ on MIG to an extent that spot rates lift their valuation of MIG from $4.10ps to $4.19ps — in-line with MIG's adjusted NAV as of 17th Aug 07. Historically, MIG has proved to be a good investment at 25 percent discount to its NAV. Operating Leverage Remains Strong: Demographics of Toronto are such that 407ETR should continue to deliver strong earnings growth for many years to come. Likewise, on-going cost reduction at M6 Toll should help deliver strong EBITDA growth and margins until traffic builds up. The analyst estimate MIG's pro-rata EBITDA to grow at c12% CAGR over the next 5 years with EBITDA margin rising to 74% (from 72%). Growth To Be Funded From Reserves: $1b of cash on the balance sheet (potentially supplemented by re-gearing of 407ETR) should allow Macquarie Infrastructure Group to fund its share of acquisitions in the near-term. At 15% discount to its last reported NAV of $3.89ps, MIG is unlikely to raise equity at the current share price levels.

Macquarie Infrastructure Group (MIG) has a Buy 1 share recommendation and a $4 price target from Australian analyst UBS. 4Q07 traffic is generally in-line with expectations across the portfolio: Roadworks continue to negatively impact US road traffic in particular (we expect roadworks to be an ongoing theme for the next ~12 months). Revenue growth across the portfolio continues to be strong and generally in-line with expectations. 4Q07 traffic & revenue data detail: 407 (35% NAV) traffic +5.3% (benefit from new lane expansion). M6 (28% NAV) traffic +3.2%, rev +19.4% (+ve & -ve impact from roadworks). WestLink M7 (7% NAV) traffic +16.8%, rev +20.7% (revenue in-line but still missing short trips). Dulles (7% NAV) traffic -1.3%, rev -1.8% (still disappointing). Skyway (6% NAV) traffic +1.4%, rev -3.2% (-ve impact from roadworks). ITR (6% NAV) traffic flat, rev +53.1% (change in traffic mix from higher truck toll). Macquarie Infrastructure Group is now ~$683m through buyback facility (~$317m remaining): Buy-back started again on 4 Jul 07 after a 2 week absence during the performance fee pricing period. Approval for the buyback expires on 23 Aug 07, however MIG may apply for an extension & we expect ASIC to finalise rules for trusts going forward in ~3 months (ie no approval required and may buy-back above NTA). The analysts' $4 share price target for Macquarie Infrastructure Group (MIG) is $4.00, which is their 12-month DCF and estimate of the price MIG can buy back stock. They believe MIG represents a good buying opportunity at current levels. Potential positive catalysts include: 1) 407 ETR refi (we estimate could be in the region of ~A$700m); 2) Potential sale of APRR stake (and positive read-through/impact for MIG NTA); 3) Continuation of buyback & possible extension.

Macquarie Infrastructure Group have a Buy 1 recommendation and a share price target of $3.80 per share from Australian stockmarkets analyst UBS. Potential bid for APRR by SACYR : French Market Regulator: SACYR must bid for Eiffage & APRR: The French market regulator has ruled that SACYR has been acting in concert with other Spanish shareholders (with respect to acquiring a majority stake in Eiffage) and must now bid for all of Eiffage. Eiffage is the majority owner of APRR with a 40.7% stake (MIG 20.4% & MEIF 20.4%). The regulator has also ruled that APRR is a substantial asset of Eiffage, and as such SACYR is now required to bid for APRR minorities (SACYR was the underbidder for APRR). MIG paid €276m for its stake in APRR (representing ~6% of MIG NTA): MIG valued APRR at €451m at Dec 06. APRR closed at €76/share which values MIG's stake at ~€585m (~30% premium to MIG NTA & 20% premium to UBSe). Media conjecture (Reuters) suggests that SACYR could pay up to €90/share. Impact to MIG: Potentially positive read through for MIG valuation of APRR (and conservative NTA in general). They estimate a sale would increase MIG NTA by up to ~15 cps (from ~$3.80), all else being equal; however cash flow coverage of distributions would fall. MIG is now ~$623m through buyback facility (~$377m remaining): MIG is currently in the pricing period for the performance fee calculation (last 10 trading days of June) and the buyback is on hold during this period. The buyback is due to commence again on 1 Jul 07 and approval expires on 23 Aug 07. MIG may apply for an extension & they expect ASIC to finalise rules for trusts in ~3 months. Their valuation is based on DCF and is $3.70 (Jun 07) with a price target of $3.80. They believe MIG represents a good buying opportunity at current levels. In our opinion, the stock has been over-sold due to concerns about bonds & the absence of the buyback.