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Jefferies initiates Brookfield Infrastructure stock with Buy, cites FFO

EditorEmilio Ghigini
Published 02/27/2024, 05:02 AM
© Reuters.

Tuesday, Jefferies began coverage on Brookfield Infrastructure (NYSE:BIPC) Partners LP (BIP-U:CN) (NYSE: BIP), assigning a Buy rating to the stock and setting a price target of C$37.00. The firm highlights the company's diversified portfolio of global infrastructure assets as a key strength.

According to Jefferies, Brookfield Infrastructure's strategic approach to organic growth and capital recycling initiatives, combined with its stable cash flow, positions it well for sustained FFO (funds from operations) and distribution growth. This growth is expected to support the company's premium valuation in the market.

Brookfield Infrastructure Partners LP operates a vast array of infrastructure assets, including utilities, transport, energy, and data infrastructure businesses globally. The company's strategy often involves acquiring high-quality assets on a value basis and managing them to generate stable and increasing cash flows.

The analyst from Jefferies expressed confidence in Brookfield Infrastructure's ability to execute its business strategy effectively. The company's focus on both organic growth and capital recycling initiatives—selling mature assets and reinvesting the proceeds into higher-return opportunities—is seen as a positive move for future financial performance.

The highly contracted cash flow profile of Brookfield Infrastructure is another aspect that the analyst believes will contribute to the company's growth through various market cycles. This refers to the long-term contracts and regulated assets that provide predictable cash flows, which are less sensitive to market fluctuations and economic downturns.

The price target of C$37.00 set by Jefferies suggests that the firm sees potential for the stock to appreciate from its current level. Brookfield Infrastructure's commitment to funds from operations and distribution growth is expected to underpin its premium valuation, as per the analyst's comments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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