Credit Suisse Bullish On Brookfield Infrastructure
Credit Suisse has reinstated its coverage on Brookfield Infrastructure Partners L.P. (NYSE: BIP) with an Outperform rating and $59 target price, saying that Street underestimates the underlying organic growth from Brookfield's existing asset base along with increasing network benefits.
Apart from abundant M&A opportunities, the brokerage said the company's evolution is a much more visible organic growth profile coming from existing assets.
"This maturation lessens the need for M&A and highlights BIP's increasing network benefits that should provide greater financial and valuation clarity," analyst Andrew Kuske wrote in a note.
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The analyst expects Brookfield to generate double-digit FFO growth over the next three years, and projected FFO growth translates into an average of 10 percent distribution growth.
Kuske's $59 target price is obtained, in part, on a NAV along with an implied 4.0 percent distribution yield (200bps spread on an assumed 2.00 percent U.S. 10-year bond yield).
Units of Brookfield closed Monday's regular trading at $48.87. The $59 price target represents a potential upside of about 21 percent.
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Latest Ratings for BIP
Aug 2016 | Credit Suisse | Reinstates | Outperform | |
Mar 2016 | TD Securities | Maintains | Buy | |
Feb 2016 | TD Securities | Maintains | Buy |
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