Does Macquarie rate Transurban Group shares a buy, hold or sell?

Can Transurban drive returns for investors?

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Key points
  • Transurban Group, a major toll road operator in Australia and North America, sees a consistent increase in average daily traffic, with significant growth in Sydney, Melbourne, Brisbane, and North America.
  • Macquarie maintains a neutral rating on Transurban with a 12-month price target of $14.62, and highlights a forward distribution yield of 4.7% as a key feature for investors.
  • Despite NSW government's toll reform updates, Macquarie foresees no significant traffic impact, with potential revenue shifts and latent value seen in Transurban's toll concessions.

Transurban Group (ASX: TCL) shares give investors the chance to invest in one of the world's largest toll road businesses. Analysts at Macquarie have revealed whether they think the ASX dividend share is a buy, hold or sell.

Transurban owns and operates toll roads in Australia (including in Brisbane, Melbourne and Sydney) and North America. Some of the roads it owns include WestConnex and CityLink.

The business generates significant cash flow each year, allowing Transurban to provide investors with a sizeable distribution each year. Its tolls largely increase at the rate of inflation, or grow on 'ratchet clauses' at the greater of CPI of 4%.

Toll road at night time.

Image source: Getty Images

Is the Transurban share price a buy?

Transurban's average daily traffic (ADT) continues to grow on its roads.

In the three months to September 2025, group ADT rose 2.7% year-over-year. Within that, Sydney ADT rose 1.7%, Melbourne ADT rose 3.2%, Brisbane ADT grew 2.6% and North America ADT went up 6.8%.

Macquarie currently has a neutral rating on the business with a price target of $14.62. A price target is where the broker thinks the share price will be in 12 months from now. That implies little change from where it is today.

The biggest part of the return could come from the income distribution, which is predicted to be 69 cents per security in FY26. That translates into a forward distribution yield of 4.7%, at the time of writing.

Latest thoughts on the toll road business

Macquarie provided some commentary on Transurban after the NSW government updated the market for additional NSW toll reform.

The Premier had already pre-released the toll cap of $60 per week will continue, though Macquarie said the "wrinkle" was that it is now capped at $5,000 per account, with the broker seeing no impact on traffic as a result. Administration fees are being removed from FY27.

Macquarie then said the following on developments and potential outcomes for certain roads:

Shifts to bidirectional tolling on SHB/T/WHT in FY29 (opening of WHT) were anticipated. This adds ~$200m of revenue to fund reform around tolls, which government said it is still seeking. There could be a variety of possibilities – two we see having merit: simply a step-down in the flag fall for cars on WCX (i.e., $1.00 is ~12% toll reduction), or elimination of the CPI+ component in the M2, NCX and WCX for cars. ED concession needs to be adjusted for bidirectional tolling, and removing its CPI+ component could be included in this.

There remains ~$1.0-1.5bn of latent value in the ED, M7 and M2 concession, through removal of IRR caps and gearing limitations. This provides government currency to negotiate price reductions or enable the M2/M7 widening of the northern sections.

In terms of the potential financials, Macquarie is projecting that in FY26 Transurban could generate $4.1 billion of revenue, $3.2 billion of operating profit (EBITDA) and $2.15 billion of net profit.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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