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Ferrovial SA (ES:FER)
BME:FER
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Ferrovial
(BME:FER)
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Rating:69Neutral
Price Target:
€69.00
▲(9.25% Upside)
Action:DowngradedDate:03/01/26
The score is driven primarily by strong operating momentum and cash generation, supported by improving but still leveraged financial positioning. Technicals are constructive with a strong uptrend, while the biggest constraint is valuation (high P/E with a modest yield). Earnings-call commentary was broadly positive on highways/407 ETR and cash inflows, with localized traffic and cost pressures as key watch items.
Positive Factors
Free cash flow generation
Sustained FCF of ~€1.4bn (up ~54% in 2025) provides durable internal funding for capex, dividends, buybacks and deleveraging. Strong cash conversion from infrastructure operations reduces reliance on external financing and supports strategic flexibility over the medium term.
North American highways strength
Robust like-for-like growth in U.S. highways and strong 407 ETR traffic and dividends signal resilient, toll-based cash flows. These long-life, low-capex assets offer predictable revenue streams and higher cash visibility, anchoring Ferrovial's earnings and funding profile over coming quarters.
Diversified backlog & business mix
A €17.2bn order book and operations across Construction, Airports, Toll Roads and Services deliver multi-year revenue visibility and diversification. This mix cushions cyclical exposure in any one segment and supports steady revenue recognition and margin recovery over the medium term.
Negative Factors
Meaningful leverage
Although leverage has improved, a ~1.8x debt-to-equity ratio still leaves the company exposed to interest cost variation and refinancing cycles. High structural debt limits balance sheet flexibility and increases sensitivity to any sustained cash-flow weakness or higher rates.
Earnings volatility
Large swings in reported earnings (sharp EPS decline) reflect project timing, asset sales and cyclical construction results. This volatility undermines predictability of profits and makes it harder to rely on earnings for stable capital allocation decisions across investment and shareholder returns.
OCF coverage of debt is modest
Operating cash flow covering ~25% of debt indicates limited internal coverage for obligations. Sustained reliance on project dividends, asset sales or refinancing elevates structural funding risk if traffic, delays or margin pressure reduce recurring cash inflows.
Ferrovial (FER) vs. iShares MSCI Spain ETF (EWP)
Market Cap
€45.36B
Dividend Yield1.42%
Average Volume (3M)1.38M
Price to Earnings (P/E)51.1
Beta (1Y)0.78
Revenue Growth5.75%
EPS Growth346.20%
CountryES
Employees25,264
SectorIndustrials
Sector Strength72
IndustryIndustrial - Infrastructure Operations
Share Statistics
EPS (TTM)0.48
Shares Outstanding733,755,400
10 Day Avg. Volume2,205,499
30 Day Avg. Volume1,377,755
Financial Highlights & Ratios
PEG Ratio-0.62
Price to Book (P/B)6.73
Price to Sales (P/S)4.13
P/FCF Ratio27.85
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€67.68Price Target Upside7.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1.03
Revenue Forecast (FY)€9.93B
Ferrovial Business Overview & Revenue Model
Company DescriptionFerrovial, S.A., together with its subsidiaries, operates as an infrastructure and mobility operator in the United States, Poland, Spain, the United Kingdom, Canada, and internationally. The company engages in the design and construction of various public and private works; and development, finance, and operation of toll roads. Its construction activities include highways, tunnels, railways, bridges and viaducts, airports, intelligent toll systems, port and airport infrastructures, buildings, energy restoration, aqueducts, water treatment plants, desalination plants, digesters, thermal drying plants, chimneys and silos, caissons, storage tanks, solar power towers, oil facilities, and other construction. The company is also involved in the operation and maintenance services of urban and industrial waste water treatment plants, and water treatment and desalination plants. In addition, it develops, manufactures, and markets asphalt and bitumen products; develops, finances, and operates airports; provides integrated solutions for the development and management of electrical transmission networks; provides mobility services, including ZITY, an electric carsharing service application; undertakes engineering works; and sells hydraulic equipment. The company was founded in 1952 and is based in Madrid, Spain.
How the Company Makes MoneyFerrovial generates revenue through multiple streams aligned with its core business activities. The Construction division contributes significantly by undertaking large-scale infrastructure projects, including roads, airports, and buildings, often funded by public-private partnerships (PPPs) and government contracts. The Airports division earns income by managing and operating airport facilities, collecting fees from airlines and passengers. In the Toll Roads sector, Ferrovial acquires and operates toll highways, generating steady revenue from toll collections. Their Services division offers facilities management, environmental services, and other support services, which also contribute to recurring revenue through long-term contracts. Strategic partnerships with governments and private entities, along with a focus on sustainable and innovative practices, further enhance their revenue potential.
Ferrovial Earnings Call Summary
Earnings Call Date:Oct 28, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 19, 2026
Earnings Call Sentiment Positive
The earnings call highlighted robust growth in highways and strong performance in the 407 ETR, contributing to a solid cash position. However, there were challenges in specific areas like traffic decline in the NTE and increased operational costs.Q3-2025 Updates
Positive Updates
Strong Highway Revenue Growth
U.S. highway revenue grew 16.4% like-for-like in the first 9 months of the year, with adjusted EBITDA up nearly 15.1%.
407 ETR Performance
Traffic growth of 9.4% in Q3, leading to a revenue increase of 18.6% and an EBITDA surge of 20.1%. Total dividends for the year expected to rise 36% from 2024.
Construction Division Profitability
Maintained solid profitability with an adjusted EBIT margin of 3.7% for the first 9 months and a 4.2% margin in Q3.
Net Cash Position
Net cash of EUR 706 million at the end of Q3, reflecting strong cash generation and disciplined investment.
Order Book Growth
The construction order book stands at EUR 17.2 billion, up 9.1% like-for-like compared to December 2024.
Negative Updates
Traffic Decline in NTE
Traffic in the NTE corridor declined 3.7% in Q3 and 4.4% in the first 9 months due to capacity improvement construction works.
Dalaman Airport Traffic Decline
Traffic declined by 1.5% in the first 9 months, affected by geopolitical situations in the Middle East.
Challenges in Operational Costs
Increased costs related to bidding and IT systems in the construction division, potentially impacting future margins.
Company Guidance
During the call, Ferrovial provided an extensive overview of its financial performance for the third quarter of 2025, highlighting strong metrics across various divisions. The company's adjusted EBIT margin reached 3.7% in the first nine months, while its net debt, excluding infrastructure projects, stood at a positive EUR 706 million. Significant cash inflows were driven by EUR 406 million in dividends from projects and proceeds of EUR 534 million from the sale of AGS Airports. Moreover, the U.S. highways segment showed robust growth, with revenue up 16.4% and adjusted EBITDA rising by 15.1% like-for-like. The 407 ETR asset reported a 9.4% traffic increase in the quarter, driving a 19.3% revenue growth over nine months. Additionally, the 407 Board approved a CAD 1.05 billion dividend for Q4, marking a 50% increase from last year. These metrics collectively indicate Ferrovial's continued financial resilience and strategic focus on North American assets.Ferrovial Financial Statement Overview
Summary
Strong 2025 revenue growth (~39%) and robust free cash flow (~€1.4B, up ~54%) support operating strength. Offsetting factors are notable earnings volatility (net income down from 2024 to 2025) and a still debt-heavy balance sheet despite leverage improvement (debt ~1.8x equity; operating cash flow ~25% of total debt).Income Statement
Revenue growth accelerated sharply in 2025 (up ~39%), and profitability remains positive with a ~9% net margin and solid ~16% operating margin. However, earnings volatility is a key concern: net income fell materially from 2024 to 2025, and margins were unusually elevated in 2024 versus the longer-run profile (including a loss in 2020). Overall, strong top-line momentum is tempered by inconsistent bottom-line performance.74
Positive
Balance Sheet
Leverage is meaningful for the business, with debt running at ~1.8x equity in 2025 (improved from ~3.1x in 2023). Equity has strengthened versus earlier years, and returns on equity were healthy in 2025 (~15%). Still, the balance sheet remains debt-heavy and prior periods show higher leverage and weaker returns, leaving less cushion if operating conditions soften.58
Neutral
Cash Flow
Cash generation is a relative strength: free cash flow was robust in 2025 (~€1.4B) and grew strongly (up ~54%), with free cash flow closely tracking reported earnings across years. The main weakness is that operating cash flow covers only a modest portion of total debt (~25% in 2025), implying continued reliance on sustained cash generation and/or refinancing capacity to comfortably manage leverage.67
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 9.63B | 9.15B | 8.51B | 7.55B | 6.78B |
| Gross Profit | 8.50B | 8.03B | 7.47B | 6.35B | 5.70B |
| EBITDA | 2.00B | 4.30B | 1.48B | 924.00M | 1.51B |
| Net Income | 888.00M | 3.24B | 460.00M | 188.00M | 1.20B |
Balance Sheet | |||||
| Total Assets | 27.42B | 29.00B | 26.32B | 26.28B | 24.90B |
| Cash, Cash Equivalents and Short-Term Investments | 4.24B | 4.81B | 4.76B | 5.09B | 5.48B |
| Total Debt | 10.73B | 11.53B | 11.56B | 11.84B | 10.75B |
| Total Liabilities | 19.75B | 20.88B | 20.44B | 19.93B | 19.06B |
| Stockholders Equity | 5.91B | 6.08B | 3.77B | 4.11B | 4.05B |
Cash Flow | |||||
| Free Cash Flow | 1.43B | 1.07B | 1.18B | 907.00M | 686.00M |
| Operating Cash Flow | 1.61B | 1.29B | 1.26B | 1.00B | 810.00M |
| Investing Cash Flow | -1.03B | 1.31B | -531.00M | -732.00M | 457.00M |
| Financing Cash Flow | -1.03B | -2.59B | -1.30B | -316.00M | -2.22B |
Ferrovial Technical Analysis
Positive
63.16
Price Trends
58.47
Positive
56.61
Positive
51.19
Positive
Market Momentum
1.20
Negative
67.39
Neutral
76.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:FER, the sentiment is Positive. The current price of 63.16 is above the 20-day moving average (MA) of 60.92, above the 50-day MA of 58.47, and above the 200-day MA of 51.19, indicating a bullish trend. The MACD of 1.20 indicates Negative momentum. The RSI at 67.39 is Neutral, neither overbought nor oversold. The STOCH value of 76.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:FER.
Ferrovial Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | €2.03B | 16.30 | 14.10% | 2.28% | 6.84% | 16.03% | |
70 Outperform | €5.58B | 23.56 | 5.28% | 4.49% | 5.00% | -64.19% | |
69 Neutral | €45.36B | 51.12 | 69.30% | 1.42% | 5.75% | 346.20% | |
67 Neutral | €2.44B | 22.03 | -6.79% | 13.00% | 11.61% | -212.68% | |
65 Neutral | €28.56B | 29.69 | 19.75% | 2.38% | 25.47% | 7.63% | |
65 Neutral | €3.58B | 42.12 | 10.80% | 5.28% | 2.03% | -32.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ES:FER
Ferrovial
63.16
21.23
50.63%
ES:ACS
Actividades de Construccion y Servicios SA
109.60
58.43
114.18%
ES:CAF
Construcciones y Auxiliar de Ferrocarriles
59.10
21.39
56.72%
ES:ENO
Elecnor
28.80
12.22
73.67%
ES:FCC
Fomento de Construcciones y Contratas
11.80
1.65
16.22%
ES:SCYR
Sacyr SA
4.54
1.25
37.96%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.