FER: Model Update

Research evidence excerpt

FER: Model Update

Ferrovial NV

Target/Upside/Downside Scenarios Investment summary

We have a relatively favourable view of Ferrovial's prospects.Ferrovial NV

75 125 Weeks 19DEC23 - 08MAY26 Long duration infra assets: Ferrovial's stakes in US managed

70 TARGETTARGET 68.0068.00 lanes and the 407 ETR are attractive long duration assets,

60 CURRENTCURRENT 59.9059.90 with the 407 ETR concession extending to 2098, with pricing

55 freedom, and US Managed lanes extending to 2061 to 2072.

45 These assets are located in relatively fast-growing North

40 American cities, with population growth and congestion key

30 drivers for these assets.

20m Capital redeployment discipline: Ferrovial's management has

15m 10m historically been a very good recycler of capital in the portfolio,

5m

2024 2025 2026 and is one of the few teams in the sector to manage its

D J F M A M J J A S O N D J F M A M J J A S O N D J F

M A M businesses as a true portfolio rather than a growing empire. FER SM Rel. MSCI EUROPEAN INDEX MA 40 weeks

Source: Bloomberg and RBC Capital Markets estimates for Target Ferrovial invested in JFK and US managed lanes, and if

opportunities were to become scarce, it is not averse toValuation

returning capital to shareholders (buybacks, dividend growthWe value Ferrovial on a SOTP, and derive a €68 PT. We

and / or special dividends).value most infrastructure assets on DCFs to capture the

different duration and other characteristics of different assets Strong track record of value creation: Ferrovial possessesin our valuation. We use post-tax WACCs of ~6.5% or both unique operational expertise (dynamic tolling) and risk

higher. We value some listed stakes at market value and tolerance (through construction capabilities) to continue to