Ferrovial shares jump 8.77% after disclosure of present value of Tennessee concession payments
Key Facts
Ferrovial shares rose 8.77% in trading on October 27, reaching an intraday high of 49.85 euros, after the company disclosed the financial structure of the I-24 highway concession in Nashville, according to an Investing.com report. The new figures detail the total value and payments due to the Tennessee Department of Transportation, and put the project’s financial commitment on a present-value basis. The company said the total present value of payments was $21 billion. That figure differs from the concession value of $24.8 billion announced at the award, since the earlier value combined components calculated on a present-value basis with others at face value. Investing.com linked the share price rise to the disclosure of the value and payment structure.
Payments are spread across stages from construction to operations, highlighting the importance of distinguishing between face value and present value when reading the figures. During the construction phase, which runs from 2027 to 2033, nominal payments to Tennessee amount to $7.7 billion, with an annual peak of about $1.1 billion, according to details Investing.com reported from the company’s disclosure. On a present-value basis, about $7.7 billion of total payments is associated with the construction phase itself. Operating payments begin at $470 million in present value for the period from 2036 to 2040, then reach $5.63 billion for the period from 2076 to 2085. These periods show that the project’s obligations are spread across long-term contracts, while the different figures cannot be added without accounting for the basis on which each was calculated.
The I-24 project extends 26 miles between Nashville and Murfreesboro, as part of a stated investment of $9.2 billion and an expected concession value of $24.8 billion, according to Ferrovial’s disclosure at the award on August 20. Chief Executive Ignacio Madridejos said at the time that the project “will enhance mobility and support the state’s continued economic success.” The company completed the project’s commercial close with the Tennessee Department of Transportation on September 30, according to its disclosure through Spain’s securities market regulator. The concession term is 50 years and begins when the lanes open to traffic. The new financial disclosure therefore follows the completion of commercial close, while the concession term remains tied to the opening of the lanes.
The October 27 gain followed a period of share price declines; Investing.com reported that the stock had lost about 19% from August through the disclosure. Ferrovial shares had fallen 16% from the company’s win of the I-24 project through October 6, compared with an 8% decline in the infrastructure sector over the same period, according to figures cited in the report from JPMorgan. On October 6, the bank cut its rating on the stock from “Overweight” to “Neutral” and lowered its price target from 65 euros to 50 euros. The report pointed to concerns about the gap between Ferrovial’s bid and those of its competitors. JPMorgan estimated the project’s internal rate of return at about 11% in its base case, rising to about 14% if traffic and pricing increased 10%, and falling to about 7% if they declined 10%.
The JPMorgan report had said that a nondisclosure agreement prevented Ferrovial from providing key details about the concession’s value, while the bank then expected financial close not to occur before the second quarter of 2027. The Investing.com report published on October 27 said the project’s financial close was now expected in the third quarter of 2027. The difference between the dates places the bank’s earlier forecast alongside the schedule cited in the newer report, without meaning that financial close has taken place. Near-term dates for investors include the release of results for the first nine months of 2026 after the U.S. market closes on October 27. The company also scheduled an analyst conference for October 28 at 15:00, with the chief executive’s investor tour in the United States set to begin on November 2.