Bank of America (BofA) has adopted a more cautious stance on European infrastructure stocks for 2026, shifting its focus towards sectors with clearer earnings visibility and fewer domestic risks. This reassessment follows a strong performance in the sector over the past year, with analysts noting average total shareholder returns of about 47% across their coverage. The change in outlook has led to a series of rating adjustments, including four downgrades and one upgrade, leaving BofA with a diversified portfolio of nine Buy, four Neutral, and seven Underperform ratings.

The bank has become particularly cautious on French concessions stocks, advising investors to avoid airports entering heavy capital expenditure (capex) cycles. Instead, BofA favors infrastructure groups with U.S. exposure and European airports that offer positive free cash flow (FCF) inflections. In transport infrastructure, several companies were downgraded to Underperform or Neutral, citing issues such as muted growth, rising tax risks in France, elevated capex, and weaker FCF dynamics.

On the other hand, certain companies were upgraded, such as one with strong growth in its Commercial segment and resilient traffic, which offset regulatory uncertainty and a long capex cycle. BofA also reiterated its preference for companies with U.S. exposure, particularly in data centers and toll roads, citing Equinix and Digital Realty as key beneficiaries of U.S. data center construction, and Transurban for pricing power in North American toll roads and optionality from managed lanes. Within regulated networks, BofA favors names with limited funding overhangs and regulatory catalysts, such as Enel, Iberdrola, and National Grid, while remaining cautious on grids with residual balance sheet uncertainty.