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Is Ferrovial (BME:FER) Cheap On Its Tennessee I 24 Project Win?

Simply Wall St · 1d ago

Ferrovial (BME:FER) is back in focus after leading consortium DriveTN was selected to deliver Tennessee's I-24 Southeast Choice Lanes project, the state's largest capital investment and first large-scale public private partnership.

Ferrovial's latest contract win comes at a time when momentum in the share price has cooled. The stock is down 13.58% on a 1 month share price return and 14.68% on a 3 month share price return. Longer term total shareholder returns of 9.40% over 1 year and 82.57% over 3 years indicate that investors who stayed invested have still experienced substantial compounding.

Scan other infrastructure focused opportunities alongside Ferrovial by reviewing the hand picked 38 power grid technology and infrastructure stocks shaping the future of large scale transport and energy corridors.

Ferrovial has just secured a long duration US project, yet the share price has pulled back over the past quarter. Is this a moment to accept current pricing, or does it make more sense to wait for a deeper markdown before buying in?

Most Popular Narrative: 20% Undervalued

Ferrovial's most followed valuation story puts fair value at about €62.23 per share, ahead of the recent €49.81 close. That gap rests on a detailed view of how its toll roads, airports and energy projects could perform over time.

The asset-light model and continual recycling of capital into early-stage projects is currently enhancing return metrics, but if macro or industry trends shift (for example, higher interest rates, tighter funding, elevated competition or delays), new projects may not match the returns of recently divested mature assets, resulting in lower future ROIC and possible downward pressure on net profit growth.

Read the complete narrative. Read the complete narrative.

Want to understand why Ferrovial might support a richer price than today? The narrative leans on measured revenue growth, rising margins and a punchy future earnings multiple that is usually associated with faster growth sectors. Curious which specific profit path and valuation hurdle need to line up for that fair value to hold.

Result: Fair Value of €62.23 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Ferrovial's story could shift if North American traffic or toll growth slows, or if green project regulations and costs compress the margin outlook.

Find out about the key risks to this Ferrovial narrative.

Another View: Ferrovial Looks Expensive On Earnings

While the narrative fair value suggests Ferrovial could be undervalued, the current P/E of 60.7x tells a very different story. It is more than double the European Construction industry at 15.1x, comfortably above peers at 25.9x, and well ahead of a 27.5x fair ratio. That gap points to real valuation risk if sentiment cools.

To see how this earnings based view is built and what might need to change for the market to move closer to that fair ratio, See what the numbers say about this price — find out in our valuation breakdown.

BME:FER P/E Ratio as at Sep 2026
BME:FER P/E Ratio as at Sep 2026

Next Steps

With Ferrovial reflecting both optimism and concern in this article, now is a good time to move quickly and review the data yourself. To see both sides of the story in one place, review the 2 key rewards and 3 important warning signs

Looking For More Investment Ideas Beyond Ferrovial?

If you stop at Ferrovial you could miss other opportunities that fit your goals. Use the Simply Wall St Screener to pressure test and expand your watchlist with fresh ideas.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.