Morgan Stanley expects a slightly positive response to Transurban Group's announcement to cut costs by -$50m in FY26 against a backdrop of ongoing toll road negotiations in NSW.

The group has flagged a reduction of around -300 positions in FY25, which is circa 7% of the workforce, while management reiterated FY25 guidance and DPS of 65c.

The broker estimates a FY26 DPS of 68c is covered by free cash flow at a rate of 107%, which compares to consensus at 68.7c per share.

Target price is $13.66. Equal-weight unchanged. Industry View: In-Line.

Sector: Transportation.

Target price is $13.66.Current Price is $14.55. Difference: ($0.89) - (brackets indicate current price is over target). If TCL meets the Morgan Stanley target it will return approximately -7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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