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On Monday, Citi analysts increased their price target on Ferrovial SE (NASDAQ: FER) shares to $58.40, up from the previous $46.43, while reiterating a Buy rating on the stock. Currently trading at $50.93, near its 52-week high of $56.43, the stock has delivered impressive returns with a 21.18% gain year-to-date. The revision reflects the analysts’ positive outlook on the company’s fundamental strengths and growth potential.
The Citi analyst highlighted the "structural attractions" of Ferrovial’s core assets, which include the 407 ETR toll road in Canada and managed lanes in the United States. These assets are characterized by strong pricing dynamics, consistent traffic growth, and longevity, all of which are expected to drive robust earnings growth in the medium term. The company maintains impressive gross profit margins of 87% and has received a "GOOD" overall financial health score from InvestingPro.
Ferrovial’s New Terminal One project at JFK Airport is nearing the end of its construction phase, with operations anticipated to begin in early 2026. This development is projected to enhance the company’s free cash flows, supporting management’s targets for shareholder returns.
Looking ahead, the analyst noted that Ferrovial’s investment in Infraestructuras Rodoviarias Brasileiras (IRB) and the opportunities to bid on additional managed lanes in the U.S. could offer further potential for valuation upside. Trading at an attractive P/E ratio of 10.13x, these factors, combined with the company’s strong portfolio and expected positive financial outcomes, underscore the decision to maintain the Buy recommendation and raise the price target. InvestingPro subscribers can access 12 additional investment tips and detailed financial metrics for Ferrovial.
In other recent news, Ferrovial has announced plans to increase its stake in the 407 Express Toll Route (ETR) by acquiring an additional 5.06% interest for CAD $2.09 billion from AtkinsRéalis. This acquisition will bring Ferrovial’s total stake in the toll highway to 48.29%. The transaction is structured in two parts: an immediate purchase of 3.30% and an option to acquire an additional 1.76% within 18 months. The deal is expected to be finalized in the second quarter of 2025, contingent upon the closure of related agreements involving CPP Investments and PSP Investments. Ferrovial has been involved with the 407 ETR since 1999, highlighting its long-term commitment to the asset. The company has warned that forward-looking statements in their announcement involve risks and uncertainties, cautioning against undue reliance on these projections. Ferrovial is a major player in the global infrastructure sector, with operations in over 15 countries and a workforce of more than 25,000.
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