Mediobanca Initiates Coverage on GEK Terna, Sees Target Price at €28.80

The value of Greece’s largest concessions portfolio has yet to be fully recognized, notes Mediobanca in a recent report, marking the initiation of its coverage (Initiation of Coverage) on GEK Terna. The Italian investment bank sets a target price of €28.80 per share and highlights an upside potential of 45%. According to analysts, the current stock price largely reflects the benefit from the successful sale of Terna ENERGIAKE by 2024. However, it does not incorporate the value of the highway portfolio developed by the company in recent years, where it has outperformed both foreign and domestic competitors. As Mediobanca points out, GEK Terna has successfully evolved into a vertically integrated concessions and construction group with the ability to significantly enhance the returns (IRR) of its concession projects to double-digit levels (mid-to-high teens). This is a key competitive advantage. The group now controls a significant portion of the country’s highway network, much of which is still under development. It benefits from concession projects that are inflation-protected, see high traffic levels, and are accompanied by low interest rates. The vertically integrated operational model, strong track record, and long remaining life of concession projects—reaching 28 years—significantly reduce investment risk. According to Mediobanca, GEK Terna’s revenue is expected to increase to €3.9 billion in 2025 from €3.2 billion in 2024, reaching €4.0 billion in 2026, driven by both the concessions and construction sectors. Similarly, the company’s EBITDA is forecasted to rise from €404 million in 2024 to €599.1 million in 2025 and €694.6 million in 2026, with the concessions sector contributing nearly 70% of total operating profit. In terms of valuation, approximately 80% of the company’s value comes from its long-term concession agreements, with highways accounting for 62%. The projected 45% upside is attributed to GEK Terna’s current growth phase, distinguishing it from other European infrastructure companies. For the first time, Mediobanca—one of the largest and most specialized investment banks in Southeastern Europe—is covering a Greek stock beyond systemic banks, placing GEK Terna on the map of top European concessionaires. Notably, the same analyst team that covers international peers such as Vinci, Eiffage, and Ferrovial authored the report. This marks the first coverage of GEK Terna by a Western European investment bank or broker, confirming the heightened interest from international investors in the company, evident in recent placements and the consistent rise in trading volume.