RBC Capital Markets anticipates a relatively uneventful February reporting season for Australian infrastructure companies. Analyst Owen Birrell expects earnings to be generally in line with expectations and few major strategic announcements from the sector. However, rising long-term bond yields continue to exert downward pressure on valuations across the board, presenting an ongoing challenge. Despite this, the infrastructure sector maintains its appeal as a defensive investment amid broader market volatility.
Specific companies to watch include Auckland Airport, Transurban, and Dalrymple Bay Infrastructure, which are all expected to deliver results in line with forecasts. Constructive commentary from these firms is anticipated. Aurizon, a rail freight operator transporting coal, minerals, and agricultural products, may experience a weaker first-half performance due to soft coal volumes. Investors should monitor any potential updates regarding the possible monetisation of Aurizon’s Network business.
Atlas Arteria, a global toll road operator, is expected to benefit from strong yield support. However, the company faces potential headwinds stemming from ongoing French tax issues related to its APRR/ADELAC earnings. These tax uncertainties could impact future performance and investor sentiment.
