Bank of America Identifies 7 Top European Infrastructure Stocks

Bank of America has identified seven European infrastructure companies as its top picks in the sector, highlighting firms positioned to capitalize on multi-year capital expenditure programs, inflation-linked revenue, and the ongoing recovery in transportation and telecommunications traffic.

The bank's 'Buy' ratings span a diverse group of operators, from airport and toll road managers to utility providers and cell tower companies, reflecting a broad-based positive outlook on the asset class.

BofA's Infrastructure Thesis

Analysts at Bank of America are focusing on companies with clear, long-term growth drivers. Key themes underpinning their selections include significant capital spending pipelines, business models with built-in inflation protection, and continued normalization of activity following the pandemic.

The list favors companies with strong balance sheets, visible earnings growth, and exposure to secular trends such as data center construction, the 5G rollout, and increased travel demand. Several of the selected firms have recently reported strong quarterly results, reinforcing the bank's positive stance.

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Top Picks Span Transport, Telecom, and Utilities

BofA's preferred stocks cover a range of infrastructure sub-sectors across Europe:

• ACS: A top pick due to its leadership in U.S. data-center construction via its Turner subsidiary. The bank notes a strong project backlog, which recently hit a record €78 billion, and a potential U.S. listing that could unlock further value.
• Aena: The Spanish airport operator is seen as a structurally attractive play on Spain's tourism boom, benefiting from unlimited-duration concessions and low leverage. BofA sees potential upside to the company's traffic guidance.
• Cellnex: As Europe's leading tower operator, BofA views the company as having a cleaner portfolio and an investment-grade balance sheet. The eventual standalone 5G rollout is considered a major, untapped medium-term growth catalyst.
• Elia: The Belgian-German transmission system operator offers a positive risk-reward profile, according to the bank. BofA highlights an under-appreciated shift to cost-plus regulation in Germany that could boost returns.
• Ferrovial: Described as a top-quality long-term compounder, its value is anchored by long-duration U.S. and Canadian toll road concessions with strong pricing power. The company recently reported a 38% increase in first-quarter adjusted EBITDA.
• Fraport: The operator of Frankfurt Airport is highlighted for its free cash flow inflection following years of heavy capital expenditure. Secured tariff growth and a new 60-80% dividend payout target support the investment case.
• National Grid: The UK utility is favored for its visible £70 billion capital expenditure pipeline in the UK and US. BofA notes improved regulatory clarity and guidance for 8-10% earnings per share growth through 2031.