Goldman Sachs Top 4 Picks for a New Infrastructure Era

Goldman Sachs has done a deep dive into how private-public partnerships (P3) could solve many of the U.S.'s infrastructure woes, arguing there could be $600 billion of additional investment over the next 10 years if governments encouraged more private ownership of assets.

Transurban/Steve Ryan

So how do they get to $600 billion? Well, Goldman Sachs reckons there could be $411 billion of investment in the U.S. if the use of P3 projects increased to the average of 16 other countries that use them to help fund their infrastructure needs. Federal and state government would need to address financial and regulatory hurdles to attract private investors.

Another $120 billion could come from the divestment of state-owned toll roads in the U.S., with those funds then used to invest in new infrastructure. Another $73 billion could be unlocked if U.S. airports and ports were privatized.

So how can investors play this theme? Goldman Sachs has broken down the infrastructure sector into three categories - owners, suppliers and builders - and selected four top picks.

Private equity giant Blackstone (BX), which is rated buy with a $37 price target, is one'owner' stock that makes the cut:

Another top pick in the'owner' category is Australian toll road operator Transurban Group (TCL.AU), which is rated buy with a price target of AUD12.87:

Goldman Sachs' top'supplier' pick is Vulcan Materials (VMC), which is rated buy with a price target of $160:

And the broker's top'builders' pick is Spain's Ferrovial (FER.ES), which is rated buy with a price target of EUR23.40:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.