BIP
Brookfield Infrastructure Partners L.P.
$39.64
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 49.8% below fair value
You pay
$39.64
Bear
$69.14
Fair
$79.02
Bull
$88.89
Bear
$69.14
+74.4%
$3.75 × 21x P/E
Fair
$79.02
+99.3%
$3.75 × 24x P/E
Bull
$88.89
+124.3%
$3.75 × 27x P/E
Key Value Driver
Normalized P/E multiple (24x base case)
Implied Market Multiple
10.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $46.20 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $79.02 per share.
Warnings
The company's reported profits differ from official accounting profits by 282%. Check what costs are being left out of the adjusted number.
The company pays out 181% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $46.20 (from 16 analysts). Our estimate is 95% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples