Report by Insight Investment Research

Robert Crimes remains bullish on the Infrastructure sector, citing strong long-term traffic growth, resilient IRRs (averaging 11.3%, +290bps above Insight’s 8.5% Ke) and deep value in listed equities trading ~40% below NAV, despite private market transactions averaging just -3% below NAV over the past decade. Towers top the table with +136% weighted average upside, with Robert favouring Cellnex over Inwit. Railroads rank second at +113% average upside, favouring Canadian National Railway over Union Pacific and Canadian Pacific Kansas City. Contractors offer +74% upside, with Ferrovial standing out vs. Eiffage and Vinci. Airports offer +42% upside but stronger opportunities are seen in Europe with ADP, Aena and FH Zurich all offering 60%+ upside. In Toll Roads, average upside is only +19% but stock selection is key, with Salik Robert’s preferred pick.

Real Estate

Report by Insight Investment Research

CLNX announces a share buyback programme of up to €800m for 2025 - much larger (and earlier) than Robert Crimes had been expecting. Given his target price is more than 140% above the current share price, buybacks are hugely value accretive. He sees potential for buybacks of €1.3bn p.a. for 4 more years after 2025, with total value accretion of €12 a share over 5 years, equal to a substantial 40% of the share price. CLNX is 3rd of 24 on Insight’s Stock Ranking System and their preferred pick in Telecom Infrastructure, ahead of Inwit (ranked 7th).

Real Estate

Report by New Street Research

Cellnex and Inwit have recently pivoted towards buying more land. Why? In part because they still see a good opportunity to deploy capital attractively, but New Street believes this is also driven by a defensive angle against a gradually rising role of land aggregators in Europe. In this note, they explore in more detail for the first time the role of land aggregators in Europe and how it might affect tower companies in future. They also update some of their broader valuation parameters for these names too. They remain Neutral on the EU tower space at current valuations.