Key Points
- Bank of America is becoming more selective of European infrastructure stocks for 2026. The sector had a strong year, with average returns of 47%.
- The bank is cautious about French transport companies due to slow growth and tax risks.
- It favors companies with U.S. exposure, particularly in data centers and toll roads.
- In regulated utilities, BofA likes names with stable funding and regulatory catalysts.
After a strong year for European infrastructure stocks, Bank of America is advising clients to be more selective in 2026. The sector delivered an average total return of about 47% over the past 12 months, and the bank’s analysts believe it’s time to be more cautious.
In a new report, BofA shook up its ratings, downgrading four companies and upgrading one. The bank is now “incrementally much more cautious” on French companies, particularly those in the transport sector. They downgraded Vinci, Aeroports de Paris, and Getlink to “Underperform” and cut Eiffage to “Neutral.” The reasons for the downgrades include slow growth, rising tax risks in France, and heavy spending on new projects that are hurting their cash flow.
So, where does BofA see opportunities? The bank is a big fan of companies with exposure to the United States. They highlighted Hochtief and ACS as key beneficiaries of the ongoing data center construction boom in the U.S. They also like Ferrovial for its strong pricing power on toll roads in the U.S. and Canada.
Within Europe, the bank is favoring airports generating positive cash flow and has upgraded AENA to “Neutral” due to strong growth in its commercial segment.
In the regulated utilities sector, BofA is seeking companies with stable funding and upcoming regulatory catalysts. National Grid, Elia, and Italgas are all rated as “Buys.” The bank is more cautious about other grid companies, where it sees some balance-sheet uncertainty.
Overall, the message from Bank of America is clear: the easy money in European infrastructure has been made. For 2026, it’s all about picking the right names in the right places.
