From Seekingalpha · Ian Bezek · · 50s
Ferrovial Toll Road Stake Still Expensive
Ferrovial's Toronto toll road stake remains costly despite strong EBITDA.
In brief
Ferrovial's Toronto toll road stake remains costly despite strong EBITDA. Ferrovial's Toronto toll road stake generates C$1 billion annual EBITDA but is priced too high for investors. Originally reported by Seekingalpha.
Ferrovial's Toronto Toll Road Stake
Ferrovial derives significant value from its 48% stake in Toronto's 407 toll road, contributing roughly C$1 billion in annual EBITDA.
Investor Concerns on Toll Roads
Bulls assign a huge multiple to this long-life concession asset. I take a more cautious approach.
Toll Road Risks
I view toll roads as structurally riskier than airports due to competition from free roads, economic downturn exposure, and potential disruption from autonomous vehicles.
Ferrovial's Asset Mix
I like Ferrovial's overall asset mix, but I don't like it enough to pay a large premium to the pure-play airport operators.
What matters most
Ferrovial's Toronto toll road stake generates C$1 billion annual EBITDA but is priced too high for investors.
