BofA Highlights 7 European Infrastructure Stocks With 'Buy' Ratings

Bank of America has designated seven European infrastructure stocks as its preferred sector picks, highlighting companies with "Buy" ratings that are positioned to capitalize on sustained capital spending, inflation-protected revenues, and ongoing recovery trends. The selections span airport operators, construction firms, utilities, and telecommunications infrastructure providers.

Key Investment Themes

According to the BofA note, the bullish outlook is underpinned by several key themes across the sector. Analysts point to multi-year capital expenditure (capex) programs driving growth, revenue streams that are contractually linked to inflation, and a continued rebound in traffic for transport and telecom assets following the pandemic.

Transport and Construction Picks

The bank's list features several companies tied to transportation and large-scale construction projects, which are benefiting from post-pandemic travel and demand for new facilities like data centers.

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• ACS: Rated a top pick for its leadership in U.S. non-residential and data-center construction through its Turner subsidiary. BofA notes its record €78 billion project backlog and the potential for a U.S. listing to unlock value. ACS reported a 7.2% rise in first-quarter net profit to €177 million.
• Ferrovial: Praised as a "top-quality long-term compounder" with strong pricing power from its U.S. and Canadian toll road concessions. The firm recently reported a 38% increase in first-quarter adjusted EBITDA to €254 million.
• Fraport: Highlighted for its improving free cash flow following a period of heavy capex. BofA points to secured tariff growth through 2028 and a new dividend payout target of 60-80%.
• Aena: Noted for its structurally attractive position benefiting from Spain's tourism boom and its low-leverage balance sheet. The bank sees potential upside from traffic growth and upcoming catalysts like a new regulatory framework.

Utilities and Telecom Infrastructure

BofA also sees value in regulated utilities and digital infrastructure leaders, which offer visible growth and stable returns.

• National Grid: The investment thesis is supported by a visible £70 billion UK/US capex pipeline and guidance for 8-10% earnings per share (EPS) growth through 2031.
• Elia: The Belgian transmission system operator is seen as having a positive risk-reward profile, driven by an under-appreciated regulatory shift in Germany that could boost returns.
• Cellnex: Described as Europe's leading tower operator, the company now possesses a cleaner portfolio and an investment-grade balance sheet. BofA views the eventual rollout of standalone 5G networks as a significant medium-term growth catalyst. Cellnex reported a 7% increase in both first-quarter revenue and adjusted EBITDA.