Transurban (ASX:TCL) share price slides as truckies push back on tolls

It’s all uphill for the toll road company’s share price today…

| More on:
falling asx share price represented by cars driving along a broken arrow heading down

Image source: Getty Images

The Transurban Group (ASX: TCL) share price is in the red on Wednesday, trading down 1.81% at the time of writing to $13.60 a share.

It seems shares in the toll company are facing multiple headwinds in today’s trading session.

Let’s take a look at why the Transurban share price is struggling.  

What’s weighing down the Transurban share price?

Shares in Transurban are facing several challenges today.

Weakness in the broader market has painted the exchange red with the S&P/ASX200 Index (ASX: XJO) currently 1.52% lower for the day.

In addition to weakness in the overall market, shares in Transurban are also pricing in a more direct challenge.

The company’s infrastructure services have been on the receiving end of a targeted campaign from transport workers.

According to a recent article in the Australian Financial Review, one of Australia’s largest trucking companies, Toll Group, has urged drivers to avoid using toll roads.

The Transport Workers Union (TWU) has also weighed in, advocating that trucking operators could not afford to keep paying rising toll fares.

In particular, the article highlighted new toll roads like Sydney’s WestConnex where trucks typically pay three times the fares of cars.

As part of the action, the TWU has urged a review of current tolling regimes and more transparency on how toll fares are set.

More on Transurban

Shares in Transurban recently made headlines after the company launched a capital raising.

The infrastructure giant is looking to raise $4.2 billion to support its acquisition of the remaining 49% stake in the WestConnex from the NSW Government for $11.1 billion.

Transurban noted that WestConnex has close to 40 years concession life remaining.

As a result, additional highway extensions are expected to generate significant free cash and support distributions.

With the increased holding in WestConnex, Transurban’s management expects to receive more than $600 million of potential capital releases until FY25.

The acquisition has resulted in mixed assessments from analysts and brokers.

Most recently, leading broker Citi issued a neutral rating on Transurban with a share price target of $13.78.

Analysts expect the company’s acquisition of WestConnex could be dilutive in the near term.

Snapshot of the Transurban share price

The Transurban share price has been all over the place this year.

As a result, shares in the infrastructure giant are relatively flat since the start of the year.

At the time of writing, the Transurban share price is trading around 2% lower for the day.

Should you invest $1,000 in Transurban right now?

Before you consider Transurban, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Transurban wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Transport Shares