It's hard to say if Franco ever considered territorial gains in Portugal in the raw sense of the word, but geopolitically and logically, a Spanish invasion of Portugal was entire, and wholy, impractical for numerous reasons. Disclaimer: Not a professional in this time period yet.

A) The Portugese still had their Anglo-Portuguese Treaty of 1373. While it is very debatable and arguable if Britain would come to Portugal aid should Portugal have been invaded, it would have been impractical for Franco to test it with an invasion. Portugal fought on the side of the Allies in the First World War, and kept close ties with Britain ever since, so it is safe to assume and fear that Britain would have at least considered aiding them. Spains chances of defeating both Britain and Portugal, was slim to none.

B) Portugal was, in all but name, a Fascist country while under the regime of antonio de Oliveira Salazar. Franco's invasion of a fellow fascist nation would not have rid him of a potential ally down the road, but also would have stained his image significantly with his fascist friends in Germany and Italy.

C) One most consider the state of Spain at the end of the Spanish Civil War in 1939. World War 2 began basically as soon as it ended, and the Civil War left Spain shattered and bleeding. Needless to say, the damage done by the more than 3 years of fighting left Spain with a rather weak army in the years following. Most of Spains tanks and planes were either German or Italian imports, much of its Morroccan and African troops were used up in the fighting at the mainland, and cities like Madrid and Barcelona were scarred and devestated by the fighting. Over 500,000 people died in the conflict, many of them civilians, and since most of the fighting took place in cities and agricultural/industrial areas, Spains infrastructure was left scattered. The state of Spain was fragile, and Franco knew it, he did his best to stay out of WW2 for these reason, knowing that Spain would still not be strong enough to wage a war.

D) Portugal, despite being neutral in WW2, exported goods to the Allies AND the Axis. Considering that one of their most exported goods was Tungsten, a rather important war meterial used in armour and weapons, an invasion of Portugal would have done nothing but angered both the Germans and the Allies.

A Spanish invasion of Portugal, ultimately, would have likely been met with a similar fate as that of Italy's invasion of Greece; Bad.

Follow up question, would UK and Portugals old treaty of protecting portugal from spanish invasion have held up in this case?