Brookfield Infrastructure Partners LP BIP

Alternate Symbol(s): T.BIP.PR.A | T.BIP.PR.B | T.BIP.UN | T.BIP.PR.E | T.BIP.PR.F | BRIPF | BIP.PR.B

Utilities Utilities - Diversified

Brookfield Infrastructure Partners L.P. is a global infrastructure company. The Company owns and operates in the utilities, transport, midstream and data sectors across the Americas, Asia Pacific and Europe. The Company’s segments include Utilities, Transport, Midstream, Data and Corporate. The Utilities segment consists of regulated transmission (natural gas and electricity) and commercial and residential distribution (electricity, natural gas, and water connections) operations. The Transport segment comprises infrastructure assets that provide transportation, storage and handling services for merchandise goods, commodities, and passengers. The Midstream segment comprises systems that provide natural gas transmission, gathering and processing, and storage services. The Data segment comprises critical infrastructure servicing customers in the telecommunications, fiber, and data storage sectors. It is also a data center provider.

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Brookfield Infrastructure Partners LP

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Post by retiredcfon May 01, 2023 8:43am

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Post# 35422420

TD

Currently have a US$49.00 target. GLTA

Brookfield Infrastructure Partners L.P.

(BIP-N, BIP.UN-T) US$34.85

Expecting Strong Q1/23, Update on Pipeline of M&A/Asset Sales

Event

BIP will report its Q1/23 results on Wednesday, May 3 (pre-market).

Impact: NEUTRAL

Q1/23E Results: We expect Q1/23 FFO of $0.73/unit, which is in line with consensus, and represents a 13% y/y increase, including organic growth at/above the high-end of BIP's 6%-9% target range.

Recent Acquisitions: We estimate that the ~$1bln acquisition of Triton (at BIP's share), which will be funded with ~$900mm of BIPC shares and ~$100mm of cash, should deliver high-single-digit FFO/unit accretion and low-single-digit AFFO/unit accretion. Triton is the world's largest owner and lessor of intermodal containers, a market that is consolidating based on multiple benefits of scale, and we see opportunities for Triton to grow by acquiring private container fleets from the global shipping lines. Triton could also serve as a platform for broader expansion in the transportation/logistics sector, although we do not expect much further detail until the deal has secured Triton shareholder support. Data4 is a European data center platform, which should meaningfully expand BIP's existing data storage operations by adding ~30 active sites in France, Italy, Spain, Poland, and Luxembourg, We estimate that the going-in FFO yield is mid-single-digit, with a very strong organic growth profile.
Capital Recycling/M&A Pipeline: BIP ended Q4/22 with $3.4bln of corporate liquidity, of which the above deals will only consume ~$600mm-$700mm. The LP is expecting to receive ~$260mm of net proceeds on the closing of two asset divestitures in H1/23, and has also launched its next round of asset sales, which is expected to generate $2bln+ of net proceeds in 2023. While investors may have some concern about BIP's ability to execute on those sales in the current macro environment, we note that considerable money has been raised for core infrastructure funds in recent years, adding considerably to the usual pool of potential buyers (SWFs/pension funds). BIP has already met its annual M&A target (~$1.5bln) less than halfway into the year, and investors will be interested in the potential for the LP to overachieve in 2023, as it did in 2021/2022.

TD Investment Conclusion

We believe that BIP is very modestly valued in relation to its very high-quality and well-diversified portfolio of long-life infrastructure assets.