CIBCTop Picks: Our preferred names include PPL for its solid financial profile and a number of potential catalysts from new projects, and BIP as a more stable interest rate outlook may increase transaction activity.
Brookfield Infrastructure Partners LP
We are reducing our price target to $39 (from $40) using a DCF model with a WACC of 7.71% and a 12.5x terminal multiple.
• Upside Scenario: $49.00 (Unchanged). Assumes multiple expands to a two-point premium on the median of PE firms (to a total of 14.5x 2024E FFO/u).
• Downside Scenario: $22.00 (Unchanged). Assumes a market-driven decrease in valuation multiple to 6.5x 2024E FFO/u.
• Key Risks To Our Price Target. Limited operational visibility, permitting and regulatory risk, inflation risk, volume risk, currency risk, access to capital,
acquisition and competition.