Jefferies has initiated coverage on Austrian construction group Porr AG (VIE:ABGV) with a “buy” rating and a price target of €37, implying a 32% upside from its last close at €28.05.
The brokerage said the market is underestimating Porr’s growth potential in Central Europe, supported by strong exposure to road and rail infrastructure projects and a record order intake in the first half of 2025.
Jefferies analysts said Porr’s is well positioned to benefit from a surge in public infrastructure spending across Central and Eastern Europe, especially in Poland and Germany.
The brokerage forecasts earnings per share of €2.75 in 2025 and €3.29 in 2026, placing its estimates roughly 6% ahead of consensus. Porr’s currently trades at 6.8x 2025 earnings, at a discount to peers such as Strabag.
In Poland, Porr stands to gain from about PLN 1 trillion in planned public infrastructure investments over the next decade, according to Jefferies.
The company is among the top three construction players in the country, with design-to-build capabilities enabling better margin capture than less integrated competitors.
Jefferies expects the ramp-up in road and rail spending between 2025 and 2028 to underpin accelerating top-line growth.
Germany represents longer-term potential, with the newly announced €500 billion infrastructure fund expected to drive investment in roads and rail beginning in 2027.
Porr’s established presence in the German market positions it well for upcoming tenders, Jefferies noted.
The brokerage flagged that Porr is targeting 50–100 basis points of margin improvement by 2030, with EBIT margins projected to rise from 3.0% in 2025 to as high as 4% by 2030.
The brokerage said Porr’s self-help initiatives and balance-sheet optimization, including the planned redemption of €150 million in hybrid instruments, could lower financing costs and support an estimated 15% annual EPS growth through 2030.
Jefferies valued Porr at a 10% discount to Strabag, citing its improving profitability and higher growth outlook. The brokerage said the stock’s about 6% free cash flow yield and about 4% dividend yield strengthen the investment case amid rising infrastructure demand.
The analysts called Porr a “pure play on European infrastructure”, noting that its operations across seven markets, chiefly Austria, Germany, and Poland, make it one of the few listed contractors focused solely on construction.
Jefferies expects higher visibility on EU and national infrastructure funding in the coming quarters to help unlock further upside for the stock.
Source :
https://www.investing.com/news/stock-market-news/jefferies-initiates-coverage-on-porr-with-a-buy-rating-citing-growth-in-central-4274190
