European companies focused on the construction and management of infrastructure lag behind on the stock market compared to other sectors, compared to the whole of European equities and compared to companies in the sector in other markets. If the global index of concessionaires and infrastructure builders rises by 14% in 2024, the European stocks barely rise 0.1% in this same period. However, the large Spanish firms in the industry stand out from the average of the Old Continent. Ferrovial, ACS and Sacyr They advance between 16% and 24% this year thanks to the improvement in expectations of analysis firms.
Recently, the analysis department of Bank of America (BofA) changed its recommendation to buy stocks such as Ferrovial or ACS due to their exposure to markets such as the United States. This is because these types of companies obtain part of their income in US dollars and with works or concessions on American soil. That is, a large part of its business would be protected against the Republican economic policies that Donald Trump has in mind, which include, among many others, trade tariffs for Europe as well.
The change in valuations of firms such as BofA translates into increases on the stock market so far this week that exceed the 5% that the Ibex 35 has advanced since Monday and that contribute to the Spanish index has reached 12,000 points and maximums not seen in 15 years. But the Ibex construction companies and concessionaires are recording their own milestones.
Ferrovial reached 30,000 million this week euros of market capitalization. And in the area of 41 euros per share it is trading at historical highs, while rising 24.4% this year. The good progress in the construction segment satisfied the market consensus, meeting expectations for the third quarter of the year, while toll roads in the United States registered a significant improvement in prices. “We expect the strong performance of the US highway segment to drive growth in the near term,” says Citi analyst Sathish B. Sivakumar.
Furthermore, this Wednesday he announced the payment of an additional dividend of 0.0346 euros per share, which would imply distributing an additional 25 million euros and which would reach, in total by 2024, 130 million euros. According to what the company communicated to the CNMV, the cut-off date for Europe would be next Friday, December 13 and payment would begin on the 27th of this month.
Sacyr did not meet market forecasts in the third quarter, according to Bankinter, although the company continues to present growth in the concessions segment with solid margins. “Currently, the concessions business represents more than 90% of our EV company value[enterprise value]. We consider that Sacyr will be able to meet its long-term objectives, until 2027, although we are slightly conservative in our estimates,” the firm explained.
For its part, ACS is close to 48 euros per share, which represents an increase of less than 6% to surpass its historical maximum of 50.6 euros that it abandoned in 2007. ACS’s success this year comes from its business in Australia and also the United States (75% of its income comes from these two geographies). In addition, the improvement in the valuation of Hochtief, a listed sector in which ACS has an 80% stake according to the latest data, also boosts ACS’s stock on the stock market.
Nevertheless, ACS is trading without potential with its recent rise given that it is already above the market consensus target price of 43.4 euros. “Although we consider the price to offer limited short-term potential, we continue to believe that there is long-term growth potential thanks to its excellent positioning, both geographical and operational,” commented Renta 4 expert, Ángel Pérez Llamazares, who places his reference for ACS at 40.4 euros.
However, currently neither Ferrovial nor ACS have a buy advice, according to the market consensus collected by FactSet and applying a division of recommendations between buy, sell and hold. In the case of both, it is advisable to maintain. Meanwhile, the experts would be indicating that it would be time to take positions on Sacyr that would have a journey ahead of almost 30% to 4.1 euros. On the other hand, Sacyr would be the most expensive in the sector at current prices, trading with a PER (times the profit is reflected in the share price) of 16 times for next year compared to 11.5 times for the average of its European peers.
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