ACS: Datacentre fears obscure a compelling growth and valuation story: Initiate with OW

We initiate coverage of ACS with a €127 price target, implying 41% upside. Following a 36% share price decline from its May peak, largely driven by deteriorating sentiment towards data centres (~30% of 2026E revenues), we see a compelling entry point into a business whose growth prospects remain firmly intact. We believe the market is underestimating both the visibility and the longevity of ACS's data centre growth, with its secured backlog already underpinning consensus expectations and a substantial pipeline of additional opportunities pointing to upside through 2030. The November 12 CMD should prove a key catalyst, with management guidance potentially dispelling fears of a slowdown and resetting medium-term growth expectations above consensus. Beyond datacentres, we see a striking valuation disconnect: ACS's 80% stake in Hochtief accounts for 96% of its current market capitalisation, leaving just 4% of its equity value attributable to the rest of the group. This implies a mere €4/sh