Ferrovial stock target raised at Jefferies on 407 pricing power

EditorRachael Rajan
Published 2024/12/20, 15:34
FER
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On Friday, Ferrovial SA (FER:SM) (OTC: FRRVF), a leading infrastructure operator, received a positive outlook from Jefferies, as the firm raised its price target on the stock. The new target is set at €46.50, up from the previous €45.00, while the Buy rating remains unchanged.

The adjustment in price target comes as Ferrovial continues to demonstrate strong pricing power, particularly with the recent toll rate increase on the 407 highway in Toronto. This move is seen as a reflection of the company's ability to manage assets that consistently deliver in terms of growth and longevity, especially in densely populated urban zones where demand for time-saving travel options is less sensitive to price changes.

Jefferies highlights that the general market consensus may underestimate the pricing capabilities of Ferrovial's 407 highway. The firm's own projections suggest a roughly 3% lead over the consensus on pricing from 2025 to 2030 and a significant 15% lead on the expected 407 EBITDA by the year 2030.

The analyst from Jefferies provided further insight, stating, "Another bumper price hike on the 407 in Toronto illustrates the pricing power FER wields across its portfolio. In congested urban areas, FER benefits from highly inelastic demand for journey time savings, and manages a portfolio of assets with peer leading duration and growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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