Hochtief’s 30% Profit Leap and Record €79bn Backlog Meet a Wary Market

Hochtief’s first-quarter numbers were undeniably strong, but the market’s reaction betrayed a lingering scepticism. The construction giant posted a 30% jump in operating net profit to €217 million, easily surpassing consensus forecasts, yet the share price barely budged and later slipped into the red for the week. At midweek the stock stood at €507, up just 1% on the day but nursing a 7.57% weekly loss – a sharp contrast to the 48% year-to-date rally.

The revenue side of the ledger offered the biggest cue for caution. While group sales expanded 5.3% to €9.4 billion (or 14% on a currency-adjusted basis), this fell short of several analysts’ projections. That was enough to trigger a bout of profit-taking after a blistering run that pushed the stock to a 52-week high of €548.50 in mid-May. The relative strength index now sits at 73, signalling that the upward momentum may need a breather.

Where Hochtief truly impressed was in its order book. New business intake surged 27% to €15.2 billion in the quarter, pushing the order backlog to a record €79.3 billion. Crucially, around 90% of those contracts are classified as lower-risk, providing multi-year visibility that buffers the group against cyclical swings. The operating net cash flow over the trailing twelve months climbed to €1.8 billion, a €700 million improvement year-on-year.

Should investors sell immediately? Or is it worth buying Hochtief?

Much of that order flow is coming from the group’s strategic pivot toward digital infrastructure, defence and energy projects. Around 60% of first-quarter orders originated from these high-growth fields, with data centres for artificial intelligence dominating the pipeline. Hochtief’s US subsidiary Turner was recently selected as construction partner for a major data centre project, underscoring the group’s ability to ride the AI investment wave.

Shareholders also had reason to cheer on the dividend front. At the annual general meeting, they approved a 26% hike in the payout for fiscal 2025, lifting the per-share distribution to €6.60, payable in July 2026. The full-year guidance remains unchanged: management still targets an operating net profit between €950 million and €1.025 billion, implying year-on-year growth of 20% to 30%. A strategic update is scheduled for the second half of 2026.

Analysts have taken note. Bernstein Research and Barclays recently upgraded their ratings to Neutral and Equal Weight respectively, without setting specific price targets. The cautious upgrades reflect a market that recognises Hochtief’s operational momentum but questions how much more upside is left after the steep ascent.

For now, the €79.3 billion backlog acts as a powerful anchor for the investment case. Yet the tension between a 30% profit surge and a volatile share price reveals an uncomfortable truth: after a nearly 50% rally, even a small revenue miss can rattle conviction. The next test will come in the second quarter, when investors will look to see whether the record order entry translates into sustained margin improvement.

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