ADP Rises as JPMorgan Upgrades on Regulatory Visibility

Shares of Aeroports de Paris advanced nearly 2% on Tuesday following JPMorgan’s upgrade to Overweight, with the bank pointing to possible outperformance driven by forthcoming regulatory clarity even amid a challenging French political environment.

According to the bank, the European infrastructure sector has seen an average valuation de-rating of roughly 15% since the onset of the Iran conflict, pressured by higher bond yields, elevated oil prices, subsequently softer traffic trends, and worries about French political risk. Within that universe, toll roads have shed about 21% and airports about 11%.

JPMorgan highlighted Fraport and ADP as offering the greatest upside potential among airport operators. For ADP specifically, analysts noted that the new regulatory framework—dubbed the ERA—is anticipated to shield the company from inflation and higher taxation, underpinning the upgrade “despite the poor political French landscape.”

JPMorgan also reaffirmed its Overweight stance on Fraport. After the stock’s pronounced underperformance, the bank suggested attention may shift back to Fraport’s free cash flow inflection, and it views Fraport as a primary beneficiary of any potential ceasefire developments.

The firm maintains a Neutral rating on Aena, citing limited upside after the stock’s strong run this year, and on Zurich Airport, where anticipated traffic deceleration and headwinds at the Noida ramp-up temper prospects.

Turning to French toll roads, JPMorgan sees “deep value emerging” at Vinci (Neutral) and Eiffage (Overweight), noting current valuations suggest French toll-road assets are being ascribed no value. However, the bank cautioned that unlocking that value probably demands stronger political visibility and better traffic trends.

JPMorgan also maintained an Overweight rating on Ferrovial, pointing out the shares have lagged since the company secured the I24 project. Although Ferrovial conveyed confidence on JPMorgan’s Back to School call last week, the bank cautioned that ongoing debate around the project could keep pressuring the stock until further specifics emerge.

Finally, JPMorgan is Neutral on Getlink, where traffic performance is mixed yet broadly supportive of estimates. The bank noted that Getlink’s insulation from French political developments and its dividend yield make it an attractive relative holding among French names over the next few months.