ACS "Digital JV remains under-appreciated; Turner's growth profile..."

Research evidence excerpt

ACS "Digital JV remains under-appreciated; Turner's growth profile..."

ACS UBS Research

Upside/Downside Spectrum

Upside/DownsideValuedrivers SpectrumPlease Turner 12m Digital Energy Turner 2030E CIMIC 12m E&C 12m fwd

fwd target EV/ value €/sh DC revenues fwd target EV/ target EV/EBIT

EBIT ($bn) EBIT

€185 upside 27.5x €20 $35bn 12.0x 11.5x

€150 base 21.5x €10 $25bn 10.0x 9.6x

€100 downside 12.5x €0 $15bn 7.5x 6.5x

Source: UBS estimates

ACS is one of our top picks in Infrastructure with the company well positioned to

capitalise on the datacentre build out. Whilst shares have risen ~30% over the past

6 weeks [see our relaunch of coverage: link], our analysis continues to suggest that the

Digital JV platform and Turner's growth profile remain mispriced. Importantly, there are

several catalysts in the next 12m, notably the lease signing for the first JV platform asset

(1H26) and potential US lane tender awards (I-24 August, I-285e October), which we

believe will allow investors to ascribe more value to these assets. Whilst the earnings

impact will not be immediate, in our view, they lay the foundation for double digit

earnings growth medium term. Post 1Q results, we raise FY26/27 EBITDA estimates by

+2% (+3% above VA cons.) and increase our PT to €150/sh. Reiterate Buy.

UPSIDE (€185): Turner order intake exceeds current run rate allowing investors to derisk

mid term earnings growth towards targets and reward Turner with further mulitple

expansion. Hochtief E&C sees a significant acceleration in the the order intake/revenues/

margin expansion beyond current cons. expectations driven by the impact of German

fiscal stimulus. US economy accelerates with growth extending beyond datacentres.

Middle East conflict reaches a swift resolution with no demand destruction. The