The Transurban Group (ASX: TCL) share price has been underperforming so far this year.
Since the start of the year, the toll road operator's shares have risen just 1%.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up almost 11% over the same period.
Is the Transurban share price in the buy zone?
One leading broker that sees value in the Transurban share price at the current level is Ord Minnett.
According to a recent note, the broker has retained its buy rating but trimmed its price target on the company's shares to $15.50.
Based on the current Transurban share price of $13.85, this implies potential upside of 12% over the next 12 months.
And with Ord Minnett pencilling in a dividend of 36.5 cents per share in FY 2022, this potential return stretches to approximately 14.5%.
Why is the broker bullish?
While the broker has revised its free cash estimates lower to reflect the impact of lockdowns on traffic volumes, it remains positive on the future. This is due partly to its belief that traffic will rebound quickly once restrictions ease.
In addition to this, the broker believes the Transurban share price is not reflective of the value of its assets. Particularly given how long life infrastructure assets are in demand with investors. It points to the sale of stakes in some of its US assets as evidence of this demand.
Ord Minnett commented: "We believe the market value of Transurban's assets remains well ahead of the implied value."
"We believe this supports the underlying thesis on Transurban and is more important than the short-term impact lockdowns are having on traffic and free cash flow," it added.
Overall, the broker believes this makes the weakness in the Transurban share price this year a buying opportunity for investors.
