Australia's transport sector is a mixed bag right now. Some stocks are taking off, others are facing delays and one or two you might rather not board at all. Here's a look at three very different ASX transport plays and whether they are a buy right now.
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Transurban Group (ASX: TCL)
Transurban, while arguably not the most exciting stock, is a consistent one. It owns and operates major toll roads. It also holds long-term government contracts to finance and build major roads, which also cover toll operations. This cash flow and revenue predictability has seen it become popular amongst investors.
It stands to benefit from some solid structural tailwinds too. With major roads playing a critical role as metro populations expand, Transurban is well positioned to deliver.
On the flipside, road projects often face delays and cost blow-outs. For example, Transurban delivered Melbourne's long awaited West Gate Tunnel in 2025 at a cost of $10.2 billion against a plan for 2022 delivery at $5.5 billion, with Transurban covering $2 billion of the additional cost. That said, Transurban has a history of disciplined cash flow management that has enabled it to wear one-off costs like this.
Its most recent results demonstrate why it's worth considering. It delivered $2.02 billion in proportional total revenue (up 6%) and $343 million in statutory profit after tax. In addition, its dividend guidance for 2026 is $0.69 per share, up 6.2% on 2025, which should keep investors content.
Is Transurban a buy?
For me, it is. At current prices, Transurban isn't likely to skyrocket your portfolio. Some analysts are predicting a small upside right now, but nothing to get excited about. However, it is likely to keep delivering stable returns and measured growth for long-term investors.
Aurizon Holdings Ltd (ASX: AZJ)
Aurizon is a national rail-freight operator, hauling bulk commodities and freight for industries such as mining and manufacturing. It operates Australia's largest coal rail system, the 2,670km Central Queensland Coal Network. The network offers critical mine to port transportation to over 50 mines in the region.
Its significant footprint in the mining industry includes a partnership with BHP Copper SA to deliver an integrated rail, road, and port solution that will shift copper transport from road to rail along the Pimba to Port Adelaide corridor.
Aurizon delivered some stronger-than-expected results in HY26, including 16% growth in underlying net profit after tax and EBITDA growth across all its business units. Its bulk business saw the highest growth at 39%, largely driven by increased rail volumes and the first freight moved under the BHP Copper SA contract.
Where I'm caught on this one is valuation. With current share prices around the $4 mark and a price-to-earnings (P/E) ratio of circa 23, I think there is too much risk of downside. I'm also cautious about its heavy exposure to coal mining, while noting that it has begun to diversify in recent years.
Is Aurizon a buy?
Right now, it's a wait-and-watch story, in my opinion. I don't think it is delivering the returns to justify its present valuation. But I think it will keep delivering growth, so I'm adding it to the watchlist. If the share price falls, it could be a winner.
Virgin Australia Holdings Ltd (ASX: VGN)
Domestic and international carrier, Virgin Australia, returned to the ASX in June 2025, after delisting in 2020 amidst the COVID crisis. Its Q1 FY26 update reported domestic capacity uplift of 5% on the prior corresponding period. It also reaffirmed that revenue per available seat kilometre (RASK) should meet expected growth of 3% to 5% in HY26.
But there are potential pitfalls ahead. While Virgin Australia enjoys a duopoly on major domestic routes across Australia, it doesn't inoculate it from economic headwinds. Although Australians love to travel, as budgets continue to tighten, changes in discretionary spending could prove challenging. Additionally, the relatively thin margins in the airline industry leave it sensitive to operating cost changes, from fuel to labour.
As we await HY26 results on Friday, this one has me thinking. I'm uncomfortable with its more recent corporate history – multiple restructures, ownership changes, and strategic resets. And I am not sure even great results would be enough to convince me just yet.
Is Virgin Australia a buy?
For me, it's a not a buy right now. Some analysts have said they see upside at current prices, however, so I may be going against the grain on this one. But I think Virgin needs longer to show it has truly recovered from a challenging period.
