Fomento de Construcciones y Contratas (FCC) AI Stock Analysis

• Market Cap: €4.92B
• Dividend Yield: 4.49%
• Average Volume (3M): 19.28K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.87
• Revenue Growth: 5.00%
• EPS Growth: -64.19%
• Country: ES
• Employees: 61,791
• Sector: General
• Sector Strength: N/A
• Industry: Waste Management
• EPS (TTM): N/A
• Shares Outstanding: 472,994,050
• 10 Day Avg. Volume: 25,722
• 30 Day Avg. Volume: 19,279
• PEG Ratio: -0.68
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 0.51
• P/FCF Ratio: 10.15
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.83
• Revenue Forecast (FY): €10.06B

• Rating: 55 Neutral
• Price Target: €11.00 ▼(-1.26% Downside)
• Action: Downgraded Date: 03/09/26
• Date: Action: Downgraded 03/09/26

The score is held back mainly by the sharp deterioration in 2025 profitability and still-elevated leverage, despite solid revenue growth and improved free cash flow. Technicals are weak with the stock trading below major moving averages and negative momentum, while valuation looks stretched on P/E though supported by a decent dividend yield.

Positive Factors

Diversified contract-based revenues

FCC’s revenues are rooted in long-term municipal and concession contracts across waste, water and construction. This contractual, diversified mix supports predictable cash flows, lower demand cyclicality and durable backlog visibility that underpin revenue resilience over 2–6 months.

Steady revenue growth; 2025 acceleration

Consistent top-line expansion, with an acceleration in 2025, indicates sustained market demand and successful tendering or contract execution. Persistent revenue growth helps absorb fixed costs and preserves scale advantages, supporting medium-term margin recovery potential if cost pressures ease.

Improved free cash flow generation

The shift to positive free cash flow in 2024–2025 shows improving cash conversion and operational cash strength. Positive FCF enhances capacity to invest in projects, service debt or sustain distributions, providing a buffer for strategic flexibility and deleveraging over coming quarters.

Negative Factors

Profitability deterioration

A sharp fall in net margin to ~1.7% materially reduces earnings quality and free cash potential. Lower profitability limits capacity to fund reinvestment, weakens resilience to cost or pricing shocks, and constrains the company’s ability to restore returns absent margin improvement.

Elevated leverage remains

Despite improvement, leverage at ~1.64x keeps financial flexibility constrained. With compressed margins and interest exposure, elevated debt raises refinancing and covenant risk and limits capacity to pursue growth or cushion project delays over the medium term.

Inconsistent cash conversion

Free cash flow lagging net income and modest operating coverage signal working-capital volatility or reinvestment needs. This inconsistent conversion increases sensitivity to project timing and receivables, making funding cycles and distributions more vulnerable in coming quarters.

Fomento de Construcciones y Contratas Business Overview & Revenue Model

Company Description

Fomento de Construcciones y Contratas, S.A., together with its subsidiaries, engages in the environmental services, water management, and infrastructure development businesses in Europe and internationally. The company offers services related to urban sanitation, industrial waste treatment and waste recycling, street cleansing, conservation of green areas, maintenance of sewerage networks, recovery of contaminated soils, and facility management. It also provides end-to-end water management services relating to the integrated water cycle, such as collection, purification and distribution of water for human consumption; sewage collection, filtration and purification; design, construction, and operation and maintenance of water infrastructure for municipal, industrial, agricultural services, etc. In addition, the company undertakes infrastructure works and building construction, such as motorways, roads, tunnels, bridges, hydraulic works, ports, airports, housing estates, housing, non-residential building, lighting, industrial climate control installations, environmental restoration, etc. Further, it is involved in the operation of quarries and mineral deposits; production of cement, limestone, plaster, and prefabricated by-products; and production of concrete. The company was founded in 1900 and is headquartered in Madrid, Spain. Fomento de Construcciones y Contratas, S.A. is a subsidiary of Control Empresarial de Capitales, S.A. de C.V.

How the Company Makes Money

FCC generates revenue through multiple key streams, primarily from its construction projects, which include civil engineering and building works for public and private entities. The company also earns significant income from its environmental services division, providing waste management, recycling, and municipal services to local governments. Additionally, FCC's water management segment, which encompasses water treatment and distribution, contributes to its revenue. The company often engages in long-term contracts and public-private partnerships (PPPs), which provide stable income and help mitigate financial risks. Strategic collaborations with local authorities and other stakeholders in various regions further enhance its revenue potential.

Fomento de Construcciones y Contratas Financial Statement Overview

Summary

Revenue growth is steady and accelerated in 2025, and free cash flow improved to positive in 2024–2025. However, profitability weakened sharply in 2025 (net margin down to ~1.7%) and leverage remains elevated (~1.64x debt-to-equity), pressuring returns (ROE fell to ~4.7%).

Income Statement

Revenue has grown steadily from 2020–2025, accelerating sharply in 2025 (annual report). However, profitability has weakened materially: net margin fell from ~7.0% (2023) and ~4.7% (2024) to ~1.7% (2025), with operating profitability also compressing versus prior years. Gross margin remains strong and fairly stable, but the step-down in bottom-line earnings in 2025 points to higher costs, financing burden, or non-operating pressures that reduce earnings quality.

Balance Sheet

Leverage remains meaningful: debt-to-equity is elevated at ~1.64x in 2025 (improved from ~2.03x in 2024, but above 2023’s ~1.21x). Equity increased in 2025, which helps the capital structure, yet returns to shareholders dropped sharply as return on equity fell to ~4.7% in 2025 from mid-teens levels in 2023–2024. Overall, the balance sheet looks serviceable but more leveraged than ideal, with profitability currently not strong enough to fully offset that risk.

Cash Flow

Cash generation is a relative strength: operating cash flow is consistently positive and remained solid in 2025, while free cash flow improved from negative in 2023 to positive in 2024–2025, with strong reported growth in 2025. That said, cash conversion is not consistently strong—free cash flow is well below net income in 2024–2025, and operating cash flow coverage metrics remain modest, suggesting working-capital swings or reinvestment needs can pressure cash available to shareholders.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.57B	9.70B	9.07B	8.41B	7.71B	6.66B
Gross Profit	5.82B	5.84B	5.41B	5.08B	4.91B	4.30B
EBITDA	1.28B	1.36B	1.49B	1.20B	1.19B	1.37B
Net Income	230.92M	164.37M	429.87M	589.06M	315.18M	580.13M
Balance Sheet
Total Assets	14.20B	15.80B	14.24B	16.72B	15.28B	14.24B
Cash, Cash Equivalents and Short-Term Investments	2.01B	2.99B	2.11B	1.86B	1.79B	1.66B
Total Debt	5.05B	5.73B	5.54B	5.37B	5.37B	5.34B
Total Liabilities	10.55B	11.06B	10.50B	10.57B	10.34B	9.80B
Stockholders Equity	2.71B	3.48B	2.73B	4.45B	3.39B	3.01B
Cash Flow
Free Cash Flow	419.21M	486.90M	437.97M	-66.05M	922.92M	358.85M
Operating Cash Flow	1.22B	1.20B	1.28B	785.38M	1.55B	746.25M
Investing Cash Flow	-862.44M	-1.05B	-1.30B	-962.44M	-938.04M	193.08M
Financing Cash Flow	154.03M	813.51M	234.72M	210.26M	-567.20M	-627.73M

Fomento de Construcciones y Contratas Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:FCC, the sentiment is Negative. The current price of 11.14 is above the 20-day moving average (MA) of 11.05, below the 50-day MA of 11.16, and below the 200-day MA of 11.27, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 32.41 is Neutral, neither overbought nor oversold. The STOCH value of 7.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:FCC.

Fomento de Construcciones y Contratas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FER	69 Neutral	€38.38B	44.79	69.30%	1.42%	5.75%	346.20%
ENO	67 Neutral	€2.54B	18.70	-3.10%	13.00%	11.61%	-212.68%
ACS	65 Neutral	€26.87B	22.99	20.71%	2.38%	25.47%	7.63%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
FCC	55 Neutral	€4.92B	―	7.94%	4.49%	5.00%	-64.19%
SCYR	53 Neutral	€3.17B	32.80	8.86%	5.28%	2.03%	-32.59%
OHLA	51 Neutral	€560.58M	297.92	0.29%	―	1.39%	72.34%