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Ferrovial’s Q1 Surge: A Beacon of Infrastructure Growth in a Shifting World

Henry RiversTuesday, May 13, 2025 11:40 pm ET

14min read

The global infrastructure sector is undergoing a seismic shift, fueled by governments worldwide pouring trillions into modernizing roads, airports, and sustainable energy systems. Against this backdrop, Ferrovial’s Q1 2025 results aren’t just a set of numbers—they’re a roadmap for investors seeking to profit from the decade-long build-out of critical infrastructure. With revenue surging 7.4% to €2.1 billion and adjusted EBITDA jumping 19.1%, Ferrovial has emerged as a leader in an industry primed for growth. Here’s why this Spanish infrastructure giant is worth your attention now.

The Highways Division: Proof of Structural Demand Resilience

Ferrovial’s Highways division delivered a 14.1% revenue boost to €324 million, driven by North American managed lanes and Canada’s 407 ETR. The U.S. Express Lanes, which include projects like Virginia’s I-66 and Texas’ I-77, saw revenue per transaction grow well ahead of inflation, even as temporary weather disruptions dented traffic volumes. Meanwhile, Canada’s 407 ETR posted double-digit EBITDA growth, with toll rates rising 7.2% and a CAD 200 million dividend (up 14.3% year-over-year) signaling strong cash flows.

This division isn’t just a revenue engine—it’s a testament to pricing power in toll roads, a sector that’s insulated from economic cycles. With governments globally prioritizing infrastructure (e.g., the EU’s €33 billion TransEuropean Transport network fund and the U.S. Bipartisan Infrastructure Law), Ferrovial’s exposure to high-margin managed lanes is a goldmine.

Construction: The Order Book Speaks Volumes

Ferrovial’s Construction division is firing on all cylinders, with an all-time record order book of €17.2 billion—45% in North America, 24% in Poland, and 14% in Spain. This geographic diversity is a key competitive edge: Poland’s Budimex subsidiary, for instance, is tackling high-speed rail projects, while U.S. projects like the Silvertown Tunnel in London (due to open this year) showcase Ferrovial’s expertise in complex, long-lead infrastructure.

Adjusted EBIT margins rose to 3.3%, a full percentage point above Q1 2024, as the division prioritizes profitable local projects over risky third-party design-and-build deals. The writing is on the wall: Ferrovial is executing better than peers in a market where public-private partnerships (PPPs) are booming.

Why the Macro Tailwinds Matter

Investors shouldn’t just focus on Ferrovial’s results—they should see them as a microcosm of three unstoppable trends:
1. Sustainability Mandates: Ferrovial’s focus on green projects (e.g., electrification corridors, smart tolling systems) aligns with the EU’s Green Deal and global decarbonization targets.
2. Urbanization Demand: Cities like New York (JFK’s New Terminal One) and Toronto (407 ETR) are growing, requiring upgrades to aging infrastructure.
3. Policy-Fueled Spending: The U.S. infrastructure bill (allocating $550 billion to roads, transit, and broadband) and the EU’s NextGeneration fund (€800 billion for green and digital projects) are creating a decade-long “build wave.”

Valuation: A Discounted Leader

Ferrovial’s stock (FER.MC) trades at a forward P/E of 13.2x, compared to Vinci’s 14.8x and ACS’s 12.5x. Meanwhile, its EV/EBITDA multiple of 8.7x lags Vinci’s 9.5x but sits below historical averages.

While shares have risen 18% YTD, they remain undervalued relative to the company’s 19.1% EBITDA growth and its long-term backlog visibility.

Risks? Yes. But the Upside Outweighs Them

Adverse weather, geopolitical tensions (e.g., Poland’s geopolitical risks), and inflationary pressures could disrupt margins. However, Ferrovial’s diversified order book and cash-rich balance sheet (€5.3 billion liquidity, net cash of -€1.8 billion) provide a buffer.

The Bottom Line: Buy Now, Harvest Later

Ferrovial isn’t just a beneficiary of cyclical infrastructure spending—it’s a strategic bet on decarbonization and urbanization, two trends that won’t reverse. With a record order book, pricing power in toll roads, and valuation discounts relative to peers, this is a stock to own as governments worldwide double down on rebuilding the physical world.

The question isn’t whether infrastructure spending will boom—it’s how big the boom will be. Ferrovial’s Q1 results say the answer is: very big.

Investors should act now—before the market catches up to the writing on the wall.

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