Ferrovial SE (FER): what the price requires

At today's price, Ferrovial SE (FER) is priced for -1.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FER

Headline

FieldValue
TickerFER
CompanyFerrovial SE
Current price$63.63/sh
CompositionConstruction 80% / Highways 14% / Airports 1% / Energy 4% / Other activities 5% / Adjustments (inter-segment eliminations) -3%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Implied growth-1.2%
Multiple paid15x operating income

Solve inputs: computed at a 7.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.5pp.

Reconcile: at the x-ray's 9.3% required return this reads ~7.4%/yr; the models below use their own rates.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
cohort percentile (of 225 peers)20
implied end-window share0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset3.04x4expensive
Earnings3.56x3expensive
Relative2.13x4expensive
Growth0.88x3justifies

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.0%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$75.560.84xyesFCF base $2.2B, growth 8% (input: historical growth), terminal g 4.0%, WACC 8.0%, 6yr projection
DCF Exit MultipleGrowth$71.900.88xyesExit EV/EBITDA: 102.3x / 104.3x / 106.3x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$25.252.52xyesP/E 23.58x (blended: static sector reference 18x + trailing (TTM) 37x), scenarios: 19.7x / 23.6x / 27.4x (bear / base = reference held flat / bull), EV/EBITDA 26.4x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$18.803.38xyesBV/sh $11.59, ROE (TTM) 15.0%, ke 9.3%
Two-Stage Excess ReturnAsset$23.662.69xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$53.731.18xyesRev $10.5B, growth 8% (input: historical growth; tapered), Terminal P/S: 3.7x / 4.4x / 5.1x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$16.173.94xyesEPS $1.35, growth 2% (input: historical EPS growth), PEG=18.30 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$1.9233.14xyesNormalized EBIT (4y avg op income, one-time charges added back) $1.13B × (1−21%) / WACC 8.0% → EPV (no growth) (excluded from median)
Residual IncomeAsset$24.272.62xyesBV $11.59 + 5yr PV of (ROE (TTM) 15.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$18.753.39xyes√(22.5 × EPS $1.35 × BVPS $11.59) — Graham's conservative floor
EV/EBITDA RelativeRelative$0.016363.00xyesEBITDA $0.53B × sector EV/EBITDA 12.0x (excluded from median)
FCF YieldEarnings$17.853.56xyesFCF $2093.5M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$43.491.46xyesEPS $1.35 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$36.401.75xyesRevenue $10.46B × sector P/S 2.5x
PEG Fair ValueRelative$50.541.26xyesEPS $1.35 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$14.574.37xyesEPS $1.35 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$7.0b
Net debt / NOPAT (after-tax)2.51x
Net debt / operating income (pre-tax)1.98x
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

At $69 (as of June 27, 2026), the price pays about 16x company-wide operating income, which solves to only about 0.8% annual operating-profit growth over five years. The market is not paying for a growth ramp; it is paying for the durability of the toll-road cash flows.

The valuation methods split hard. Only the growth-DCF reaches the price near $74 to $76; the asset, earnings-power, and peer-multiple methods sit far below it. That gap is the moat premium the static frames cannot price.

Q1 2026 showed where the value lives: revenue up 10.2% like-for-like to 2.1 billion euros, adjusted EBITDA up 15%, and 407 ETR lifting EBITDA 25.4%. Construction is most of the revenue, but the concessions are most of the worth.

Bull Case

The cleanest way to read Ferrovial is through where it puts its money, because the portfolio is the thesis. Over the past two years management sold its Heathrow stake, leaned into North America and India, and added to its crown asset, agreeing alongside the Canada Pension Plan to buy an additional stake in 407 International. That is capital rotating out of a regulated European airport and into an unregulated Canadian toll road whose pricing power the company can actually control. The 20-F describes a tolling system that lets it adjust fees to the time savings it offers drivers, optimizing revenue rather than accepting a capped return (accession 0001628280-26-011789). When a company sells the asset it cannot price and buys more of the asset it can, the capital allocation is telling you what it believes compounds.

The shareholder-return mechanics reinforce that read. Ferrovial pays a scrip dividend semi-annually around May and November (accession 0001628280-26-011789), funding distributions out of concession cash flow while the construction arm churns working capital. The December 2025 inclusion in the Nasdaq-100, which the filing frames as broadening the U.S. shareholder base and enhancing visibility (accession 0001628280-26-011789), is the structural reason a Spanish-rooted infrastructure operator now trades with a U.S. growth multiple rather than a European utility one.

The numbers behind the rotation are showing up. Q1 2026 revenue rose 10.2% like-for-like to 2.1 billion euros with adjusted EBITDA up 15%, and the managed-lanes business in the U.S. raised revenue per transaction by double digits while 407 ETR grew EBITDA 25.4% to CAD 492 million in revenue. Against peers in the engineering-and-construction cohort, KBR, Jacobs, and Fluor, Ferrovial is the one with a self-pricing annuity bolted onto the contracting business, and the growth-DCF at $74 to $76 is the only method built to see it.

Bear Case

Read this through the cycle, because most of the reported business is construction and construction is where peak earnings and sustainable earnings drift apart. Construction carries roughly 80% of revenue but only a thin slice of the profit, and it runs on fixed-price contracts booked under percentage-of-completion accounting, recognizing revenue against forecast costs (accession 0001628280-26-011789). The 20-F also flags rising competitive tension as capital crowds into the same markets, pressuring prices (accession 0001628280-26-011789). A contracting book that competes on price into a crowded field is exactly the kind of business that looks fine at the top of a cycle and disappoints at the turn, and the company-wide operating margin near 9% to 12% leaves little cushion if a few large projects slip.

The valuation leaves no room for that. At the price, only the growth-DCF reaches the level; the peer-multiple method lands near $26, the asset methods between $19 and $24, and the earnings-power and FCF-yield methods in the high teens. The stock therefore trades at three to four times what its book value and current earnings power support, on the premise that the concession compounding never breaks. The implied growth of under 1% a year sounds undemanding, but it is the wrong reassurance: the price is not betting on growth, it is betting on the permanence of a multiple that the static frames say is two to four times too high.

The macro lever with the most leverage is rates, and toll-road equity is rate-sensitive in two directions at once. The inversion runs at a cost of capital under 8%, and each additional point of cost of capital would move the implied operating growth by nearly 7 points, so the durability premium is really a discount-rate premium. If long rates stay higher for longer, the present value of decades-out concession cash flows compresses precisely as the construction cycle softens. The Heathrow sale removed one regulated risk, but it concentrated the story into a smaller set of long-duration assets whose worth is most exposed to the variable management controls least.

Valuation

Inverting the price makes the bet legible. At $69 the market pays about 16x company-wide operating income, which solves to roughly 0.8% annual operating-profit growth over a five-year stage at a cost of capital near 7.9% with 4% terminal growth. Each point of cost of capital would shift that implied growth by about 6.7 points, so this is a long-duration asset whose valuation is governed by the discount rate more than by the growth assumption.

The model X-ray is unusually lopsided, and it is worth saying why. Only the growth family reaches the price, with the perpetual-growth DCF at $74 and the exit-multiple DCF at $76. Every other family sits far below: relative valuation at $26, the excess-return and residual-income methods between $19 and $24, the Graham number at $19, and the earnings-power and earnings-yield methods in the mid-teens. One peer-multiple reading is an artifact, because consolidated EBITDA is understated in the extraction for an IFRS reporter, so that single line should be ignored rather than read as a signal. Strip it out and the pattern is clean: the static frames see a richly valued contractor, and the forward frame sees a durable concession.

That split is the whole valuation. The price is justified only if the toll-road and managed-lanes cash flows are as durable and as growable as the growth-DCF assumes. The within-range label carries a caveat in the data, that comparison information is limited, so it should be read directionally. The honest summary is that this is a durability premium on a small set of long-life infrastructure assets, defensible to a buyer who underwrites the concessions and expensive to one who does not.

Catalysts

Q1 2026 was the most recent hard read and it was strong: revenue of 2.1 billion euros, up 10.2% like-for-like, with adjusted EBITDA up 15%. The North American highways portfolio did the heavy lifting, as U.S. managed lanes raised revenue per transaction by double digits and 407 ETR grew revenue to CAD 492 million with EBITDA up 25.4%. The next print is the live test of whether toll-road pricing power keeps outrunning the construction drag.

The portfolio reshaping is the multi-quarter story. Ferrovial agreed with the Canada Pension Plan Investment Board to acquire an additional stake in 407 International, closing part at deal and deferring the rest, while it has lowered European exposure including the sale of its Heathrow position. Progress on integrating the larger 407 interest and on its U.S. managed-lanes pipeline is what feeds the concession compounding the bull case rests on. The December 2025 Nasdaq-100 inclusion is a structural tailwind for the U.S. shareholder base.

Sell-side sentiment is constructive. The consensus rating sits at Buy across roughly 22 analysts, with Barclays reinstating coverage at Overweight and a 70 euro target and Morgan Stanley lifting its target to 70 euros from 64 at Overweight, though the average 12-month target near 61 euros implies the shares are close to fairly valued after the run.

Sources: stocktitan.net (Q1 2026 6-K), tickeron.com (Q1 2026 recap), simplywall.st (FER analysis), finance.yahoo.com (FER quote).

Peer Cohorts (Per Segment, With Filing Citations)

Construction (reported)

Highways / Airports (reported)

Energy (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive FER report on boothcheck