Vinci: Surprise French Election Reintroduces Political Risk for Toll Road Operators

Shares in Vinci opened 5% lower following the surprise announcement at the weekend of French national elections triggered by the National Rally’s resounding victory in the recent European Union parliamentary elections. In previous election campaigns, this political party has pledged to renationalize highways, which is a direct attack on Vinci as it operates 50% of French toll roads. We believe the likelihood of such a decision being imposed and any subsequent implementation is low and maintain our EUR 133 fair value estimate, offering investors approximately 25% upside from the current share price.