Atlas Arteria: Updating for the new French tax impost

About the author:

Author name:

By Nathan Lead

Job title:

Senior Analyst

Date posted:

03 October 2023, 7:30 AM

Sectors Covered:

Infrastructure, Utilities, Banks

• Atlas Arteria's (ASX:ALC) recent share price decline reflects the material downgrade to distributions receivable by ALX from its key French toll road assets as a result of the proposed new French tax. While ALX’s cash yield of 7.2% looks attractive, we no longer think the current DPS level is sustainable beyond FY25 given the cashflow hit.
• Downgrade from ADD to HOLD. Target price reduced to (login to view). Value upside rests with an uncertain legal process to extract compensation under the concession agreement and/or a takeover bid.

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