The Transurban Group (ASX: TCL) share price is up by about 6% over the last 3 weeks. It is up 0.21% today but that comes against a backdrop of a falling market. The S&P/ASX 200 Index (ASX: XJO) is down 0.53% as of writing.
While the toll-road operator hasn't had any price-sensitive announcements in that time, more investors are clearly buying Transurban shares than selling. So, what's going on?
Let's take a closer look.
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Why Transurban is trucking along
Just before this period of sustained growth, the Transurban share price fell heavily on the release of its full-year results.
The company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 3.3%, its revenue was down 0.3%, and free cash decreased 13.5%.
The group's average daily traffic dropped 0.4% over the financial year – including a 24.5% fall in Melbourne and 13.3% fall in North America. Sydney's toll usage increased but this was due to the opening of two new toll roads in the city. Transurban says COVID lockdowns were the primary driver of falling traffic numbers.
As Motley Fool's own Scott Phillips says, share pricing is more about expectations than anything else. Investors may very well have expected a better result and that's why the Transurban share price fell.
But then why is it rising now?
Well, one reason may be improved broker ratings. As Motley Fool has previously reported, brokers are looking favourably on Transurban shares and their dividends. Analysts at Ord Minnett have slapped a buy rating and a $15.50 price target on the company.
Another may have to do with lockdowns. Now this may seem counter intuitive, especially considering what lockdowns meant to Transurban finances last year.
More likely, it may be because of the expectation that lockdowns will decrease once more people are vaccinated. Australia, for example, plans to only have lockdowns in "very limited circumstances" once 80% of the population is fully vaccinated.
Investors may be thinking Transurban will get an influx of cash when the Sydney and Melbourne lockdowns end once and for all.
Transurban share price snapshot
Over the past 12 months, the Transurban share price has increased 7.2%. It's underperformed the ASX 200 by about 19 percentage points.
Transurban has a market capitalisation of $39 billion.
