The value of Greece’s largest portfolio has not yet emerged, Mediobanca notes in a recent report, which begins its coverage stock (Initiation of Coverage) of GEK TERNA. The Italian Investment Bank sets a target price of 28.8 euros per share and distinguishes 45%.
According to analysts, the current share price reflects, for the most part, the benefit of the successful TERNA ENERGY sale transaction within 2024. It does not, however, incorporate the value of the highway portfolio that the company has developed in recent years, prevailing. As Mediobanca notes, GEK TERNA has successfully evolved into a vertical concession group, with the ability to significantly enhance the IRRs of the concessions it undertakes, at double-digit levels (Mid-to-High Teens). This is its essential competitive advantage.
The Group today controls a significant part of the country’s motorway network, a large part of which is still in the process of growth. It benefits from concession projects, which are shielded against inflation, record high levels of traffic and are accompanied by low interest rates. The vertical operating model, a strong track record and the long residual life of concessions – reaching 28 years – significantly reduce investment risk.
The proceeds of the GEK TERNA Group is foreseen, according to Mediobanca, to increase to 3.9 billion euros in 2025 from 3.2 billion in 2024 and reaching $ 4.0 billion in 2026, with a push of both the concessions and the construction sector. On a similar course, the Group’s EBITDAs are projected to increase from € 404 million in 2024 to 599.1 million in 2025 and 694.6 million in 2026, with the concessions contributing almost 70% of total operating profitability.
At the valuation level, according to the SUM-OF-THE-PARTS method, about 80% of the value comes from long-term concessions, of which motorways account for 62%. The projected 45% rise is justified by the growth phase of GEK TERNA today, which differentiates it from other European infrastructure companies.
On the map of top European concessionaires
This is the first time that Mediobanca – one of the largest and most specialized investment banks in Southeast Europe – covers a Greek share beyond systemic banks, placing GEK TERNA on the map of top European concessions. An indication of its infrastructure specialization is that the exhibition for GEK TERNA is signed by the same group of analysts covering internationally and other like -minded companies, such as French Vinci and Eiffage, Spanish Ferrovial and others.
The Mediobanca report is, at the same time, the first coverage of GEK TERNA by Western European Investment Bank or Broker. This confirms the enhanced interest currently recorded by the international investment public for the company. This interest is consistently reflected, with a typical example being the recent placement, as well as the constant rise in the stock.