Infrastructure investing primer: sector primer global picks

Research evidence excerpt

Infrastructure investing primer: sector primer global picks

European road concessions

Ferrovial, Buy €68 PO

Marcin Wojtal, MLI (UK), +44 207 996 1070, marcin.wojtal@bofa.com

Investment thesis

Ferrovial is one of our “25 Stocks for ’26” and is also on our Europe 1 list. We consider

the company to be among the highest-quality long-term structural compounders in the

infrastructure space. The company operates a top-tier portfolio of toll roads across the

US and Canada, underpinned by long-duration concessions (average portfolio duration

above 55 years) and significant pricing power. A stronger than expected Q1 2026

EBITDA performance demonstrated resilient demand despite substantial toll increases,

highlighting the inelastic nature of demand. The portfolio is also well positioned

geographically, with exposure to attractive North American markets supported by strong

underlying macro and demographic trends (Toronto, Dallas-Fort Worth, North Carolina,

Virginia). Ferrovial has established itself as a leading name in the managed lanes market,

with a strong track record of winning and delivering complex projects. We believe this

positions the company to benefit from further value creation as new managed lanes

opportunities are awarded in the US. No value creation from this pipeline is included in

our PO.

Key differentiation: significant toll roads pricing power

The Canadian motorway 407 ETR (45% of our NAV for Ferrovial) raised tolls by c.25%

for 2026E, with the announcement at the end of November (vs BofAe and VA consensus

at c.+10% YoY). The new tolls came into effect on 1 January 2026. We project this to

translate into a 22% increase in revenue (allowing for some price elasticity of demand

and user switching to less expensive times of the day) and c.23% growth in EBITDA. We