More Upgrades Mr. Kwan (RBC) raised his Brookfield Asset Management Inc. target to US$65 from US$59 with an “outperform” rating, while BMO’s Sohrab Movahedi bumped up his target to US$61 from US$57 with an “outperform” rating. The average is $62.37.
“The 3 key takeaways are: (1) with BPY Coming Back to BAM Now, BAM is starting its plan to grow and surface value within the portfolio; (2) the combination of a very favorable fundraising environment plus acquisitions that could significantly increase management fee revenues are positives for Fee Related Earnings (FRE) growth; and (3) despite hitting its US$1-billion realized carried interest target for 2021 already, BAM may only be 50 per cent done with its planned monetizations for this year, which could drive sustained elevated realized carried interest in the near term,” Mr. Kwan said. “While BAM’s share price has improved recently, the shares significantly underperformed U.S. peers this year and this could be a potential driver of further valuation upside in the near term by narrowing the valuation discount, particularly given BAM’s positive fundamentals.”