Aurizon Holdings Ltd. (AU:AZJ)
ASX:AZJ
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Aurizon Holdings
(Sydney:AZJ)
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Rating:72Outperform
Price Target:
AU$4.50
â–²(10.02% Upside)
Action:Upgraded
Date:02/17/26
The score is driven primarily by steady (but mixed) financial performance with strong cash generation, complemented by constructive technical momentum. Positive earnings-call signals—raised dividend expectations and continued buybacks alongside maintained EBITDA guidance—support the outlook, while valuation is only moderate due to a mid-to-high P/E despite an attractive dividend yield.
Positive Factors
Free cash flow generation
Sustained FCF growth (41% increase to $335m) provides durable internal funding for maintenance capex, debt servicing, dividends and buybacks. Strong cash conversion cushions the business against commodity cycles and funds strategic investments without relying on external funding.
Negative Factors
Rising leverage
Elevated gearing (55.5%) and net debt/EBITDA ~3.1x reduce financial flexibility and magnify downside risk in cyclical commodity or volume shocks. Higher leverage increases interest exposure and constrains capacity for growth investment or further capital returns without deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Sustained FCF growth (41% increase to $335m) provides durable internal funding for maintenance capex, debt servicing, dividends and buybacks. Strong cash conversion cushions the business against commodity cycles and funds strategic investments without relying on external funding.
Read all positive factors
Aurizon Holdings (AZJ) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$7.10B
Dividend Yield4.29%
Average Volume (3M)5.23M
Price to Earnings (P/E)23.9
Beta (1Y)0.51
Revenue Growth4.70%
EPS Growth-20.38%
CountryAU
Employees6,057
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)0.18
Shares Outstanding1,683,307,300
10 Day Avg. Volume6,154,615
30 Day Avg. Volume5,226,571
Financial Highlights & Ratios
PEG Ratio-0.79
Price to Book (P/B)1.33
Price to Sales (P/S)1.40
P/FCF Ratio7.08
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$3.89Price Target Upside-4.89% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.25
Revenue Forecast (FY)AU$4.14B
Aurizon Holdings Business Overview & Revenue Model
Company Description
Aurizon Holdings Limited operates as a prominent rail freight service provider throughout Australia via its subsidiaries. The company organizes its business across Network, Coal, Bulk, and Other divisions. It specializes in transporting a diverse ...
How the Company Makes Money
Aurizon makes money primarily by providing rail freight services and related access services. Its main revenue streams include: (1) Above-rail haulage: charging customers to move freight (notably bulk commodities such as metallurgical and thermal ...
Aurizon Holdings Earnings Call Summary
Earnings Call Date:Feb 15, 2026
(Q2-2026)
| Next Earnings Date:Aug 17, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive financial and strategic update: underlying EBITDA, free cash flow and EPS showed strong growth, record Bulk results and meaningful cost savings were delivered, and the company increased shareholder returns via a higher dividend payout and a buyback extension. Strategic progress includes the UT5+ submission, major BHP contract commencement and progress on containerised freight mitigations. Offsetting factors include continued safety focus following a deterioration in total recordable injuries, ongoing containerised freight profitability challenges from third‑party disruptions, ERP implementation costs, and Coal yield/headwinds and contractual uncertainty in the Hunter Valley. Overall, the positives around earnings, cash generation, cost discipline and capital management outweigh the highlighted challenges.Positive Updates
Underlying EBITDA Growth
Underlying EBITDA increased by 9%, driven by solid contributions from Network, Bulk and Coal and supported by regulatory revenue and higher volumes.
Negative Updates
Containerised Freight Profitability and Disruptions
Containerised Freight EBITDA declined by ~$11 million (partially due to a prior period $18 million legal settlement). Breakeven has not yet been achieved due to Cross River Rail disruptions, higher operating costs from increased frequencies and third-party network outages.
Read all updates
Q2-2026 Updates
Positive
Negative
Underlying EBITDA Growth
Underlying EBITDA increased by 9%, driven by solid contributions from Network, Bulk and Coal and supported by regulatory revenue and higher volumes.
Read all positive updates
Company Guidance
Aurizon maintained group underlying EBITDA guidance of $1.68–$1.75 billion and lifted full‑year dividend expectations to $0.22–$0.23 per share (from $0.19–$0.20) alongside a 90% payout ratio (interim dividend $0.125/share, 90% franked); non‑growth CapEx was trimmed to $580–$600 million (including $30m transformation capital) while growth CapEx was maintained at $100–$150 million and long‑term sustaining CapEx is expected ~ $550–$600m pa; half‑year CapEx was $327m (non‑growth $247m, growth $80m). Management reported underlying free cash flow of $335m (up 41%), a H1 cash tax rate of 32% (expected <30% by year‑end), group gearing of 55.5% (56.2% FY25), group net debt/EBITDA of 3.1x and credit ratings BBB+/Baa1, and announced a $100m buyback extension (taking FY26 buybacks to up to $250m) after $425m of buybacks completed in 18 months at an avg price of $3.36 (126m shares cancelled, EPS +7.4%); guidance assumes Network, Coal, Bulk and Other EBITDA will be higher than FY25 and excludes major supply‑chain disruptions or extreme prolonged wet weather.Aurizon Holdings Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
60
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.97B | 3.87B | 3.76B | 3.44B | 3.00B | 2.96B |
| Gross Profit | 894.00M | 3.25B | 1.56B | 712.00M | 796.00M | 870.10M |
| EBITDA | 1.54B | 1.53B | 1.64B | 1.38B | 1.46B | 1.50B |
| Net Income | 305.00M | 303.00M | 406.00M | 276.00M | 513.00M | 730.30M |
Balance Sheet | ||||||
| Total Assets | 11.62B | 11.64B | 11.82B | 11.89B | 9.85B | 10.00B |
| Cash, Cash Equivalents and Short-Term Investments | 43.00M | 64.00M | 49.00M | 92.00M | 172.10M | 148.80M |
| Total Debt | 5.20B | 5.50B | 5.08B | 5.28B | 3.34B | 3.88B |
| Total Liabilities | 7.48B | 7.56B | 7.38B | 7.54B | 5.44B | 5.72B |
| Stockholders Equity | 4.14B | 4.09B | 4.44B | 4.35B | 4.41B | 4.27B |
Cash Flow | ||||||
| Free Cash Flow | 435.00M | 765.00M | 451.00M | 91.00M | 641.50M | 580.60M |
| Operating Cash Flow | 1.12B | 1.46B | 1.27B | 849.00M | 1.19B | 1.10B |
| Investing Cash Flow | -678.00M | -707.00M | -692.00M | -2.85B | -527.00M | -361.00M |
| Financing Cash Flow | -445.00M | -739.00M | -626.00M | 1.92B | -639.70M | -615.00M |
Aurizon Holdings Technical Analysis
Positive
4.09
Price Trends
4.19
Positive
4.02
Positive
3.67
Positive
Market Momentum
0.03
Positive
47.10
Neutral
15.82
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:AZJ, the sentiment is Positive. The current price of 4.09 is below the 20-day moving average (MA) of 4.25, below the 50-day MA of 4.19, and above the 200-day MA of 3.67, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 47.10 is Neutral, neither overbought nor oversold. The STOCH value of 15.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:AZJ.
Aurizon Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | AU$7.10B | 23.91 | 7.42% | 4.29% | 4.70% | -20.38% | |
72 Outperform | AU$25.18B | 18.59 | 28.67% | 2.69% | 5.29% | 15.50% | |
65 Neutral | AU$2.93B | 27.33 | 20.27% | 2.65% | 26.80% | 40.18% | |
64 Neutral | AU$5.41B | 34.14 | 7.97% | 3.11% | -4.99% | 120.98% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | AU$9.06B | 41.46 | 7.13% | 2.07% | 18.00% | -2.14% | |
51 Neutral | AU$2.89B | 99.64 | 2.80% | 4.73% | 10.18% | -64.24% |
* Industrials Sector Average
AU:AZJ
Aurizon Holdings
4.21
1.30
44.77%
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Aurizon Holdings Corporate Events
Mondrian Investment Partners Exits Substantial Holder Position in Aurizon
Jun 16, 2026
Aurizon Holdings has disclosed that Mondrian Investment Partners Limited, acting as a fund manager, has ceased to be a substantial shareholder in the company as of 12 June 2026. The change reflects that Mondrian no longer holds a significant votin...
Australian Retirement Trust exits substantial holder status in Aurizon Holdings
May 26, 2026
Australian Retirement Trust Pty Ltd has notified Aurizon Holdings that it has ceased to be a substantial shareholder in the rail freight operator as of 22 May 2026. The change reflects a reduction in the fund’s relevant interest in Aurizon&#...
Aurizon Lifts Freight Volumes and Reaffirms FY2026 Earnings Guidance
May 5, 2026
Aurizon reported higher volumes across its key businesses for the ten months to 30 April 2026, with network tonnages, coal haulage, bulk volumes and containerised freight all increasing despite adverse weather and third-party track outages. While ...
Aurizon Issues 429,359 Unquoted Performance Rights Under Employee Scheme
Apr 10, 2026
Aurizon Holdings has notified the market of the issue of 429,359 unquoted performance rights under its employee incentive scheme, effective 1 January 2026. The move underscores the company’s continued reliance on equity-based remuneration to...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.