Despite a recent sell recommendation out of Goldman Sachs, Aurizon Holdings Ltd (ASX: AZJ) shares are holding their own, up 0.4% to $4.34 at the time of writing.
Goldman Sachs placed a $3.90 price target on Aurizon shares last week, but the rail and freight operator has reiterated its long-term profitability despite short-term headwinds over regulatory approval issues, the cessation of iron ore mine operations and rising maintenance costs.
Increases in free cash flow are a positive thing, with between $650 million and $700 million expected for FY18 – up from $634 million in FY17.
Aurizon has a good track record and strong competitive advantage, so despite the likely downgrade to its FY19 earnings, the company can hopefully turn things around after that given its ability to generate cash.
Other transport stocks to keep an eye on include Transurban Group (ASX: TCL), with its share price up 0.5% to $12.17 at the time of writing, and Brambles Limited (ASX: BXB) – also up 1% to $9.01 at the time of writing.
