Getlink: A Buying Opportunity Amid Temporary Traffic Headwinds

The May 2025 traffic report from Getlink (GET) revealed a dip in both passenger and truck shuttle volumes through the Channel Tunnel. While this has sparked near-term concerns, the decline stems from transient calendar-related factors, not underlying structural weakness. For investors, this presents a compelling entry point into a company uniquely positioned to capitalize on long-term trends in low-carbon logistics, EU-UK trade resilience, and cross-channel infrastructure dominance.

Decoding the Dip: Temporary Factors vs. Structural Strength

The 1% year-on-year decline in passenger vehicles and 4% drop in truck traffic in May 2025 were driven by calendar shifts, not deteriorating demand. Easter weekend and UK school holidays fell in April 2025, reducing March and May travel volumes. Year-to-date figures show resilience: passenger vehicle traffic rose 3%, while truck traffic dipped just 1%, underscoring stable demand.

Getlink's market share gains—36.4% for trucks and 62.1% for passenger vehicles—highlight operational excellence. The company's “smart border” system, launched in late 2020, continues to reduce congestion and enhance efficiency. Meanwhile, Eurotunnel's infrastructure remains vital for 25% of EU-UK trade, a position fortified by the ElecLink electricity interconnector, which balances energy needs and reduces grid volatility.

Structural Growth Drivers: Beyond the Traffic Report

1. Low-Carbon Logistics Dominance:
   Getlink's rail and shuttle services avoid 1.9 million tonnes of CO2 annually compared to road transport. As the EU tightens emissions standards, Eurotunnel's rail freight division (Europorte) is poised for growth. The company's green bond issuance and sustainability commitments align with institutional ESG mandates.

2. ElecLink Synergies:
   The electricity interconnector's resumption in February 不在乎2025 injected €33 million in Q1 revenue. With 83% of 2025 capacity already secured and plans for a second interconnector (ElecLink 2), Getlink's cross-asset diversification mitigates reliance on any single business line.

3. Trade Resilience:
   Post-Brexit, the Channel Tunnel's role as a customs-efficient gateway is irreplaceable. Getlink's acquisition of Associated Shipping Agencies (ASA) and Boulogne International Maritime Services (BIMS) in late 2024 strengthens its logistics ecosystem, ensuring smoother cross-border flows.

Valuation: A Discounted Asset with Strong Metrics

Despite the May traffic dip, Getlink's financials remain robust.
- Profitability: EBITDA margins of 51.8% and a FCF margin of 22% reflect strong cash generation.
- Debt Management: A Debt/EBITDA ratio of 3.98x is healthy, with a recent €600 million green bond refinancing debt at lower rates.
- Analyst Consensus: An average 12-month price target of €18.37 (10.9% upside) from 8 analysts, including a bullish €20.40 call from Morgan Stanley.

The stock's recent dip to €16.37—near its 52-week low—has created a valuation discount. Technical support at €16.05 offers a risk-defined entry, with resistance at €16.80 signaling a potential rebound.

Investment Thesis: Buy the Dip, Play the Long Game

Near-Term Catalysts:
- June traffic data (due July 7) could show recovery as seasonal demand normalizes.
- ElecLink's 2026 revenue commitments (€125 million) and Europorte's rail freight growth.

Long-Term Tailwinds:
- EU-UK trade volumes are projected to grow as businesses adapt to post-Brexit logistics.
- Sustainability mandates will favor rail over road transport, boosting Europorte's relevance.

Risk Factors:
- Prolonged economic weakness in Europe could dampen freight demand.
- Regulatory changes in cross-border transport.

Conclusion: A Strategic Entry Point

Getlink's May traffic decline is a paper cut in the context of its 30-year concession and structural advantages. With a discounted valuation, strong fundamentals, and catalysts aligned for 2025, the stock offers asymmetric upside. Investors should consider accumulating shares near €16.30, with a stop-loss below €16.05 and a target of €18.37. For those willing to look beyond the quarterly noise, Eurotunnel's tunnel remains a cornerstone of cross-channel trade—and a compelling investment.