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Brookfield Ord Shs Class A T.BN

Alternate Symbol(s):  BN | T.BN.PR.C

Brookfield Corporation is an owner and operator of real assets. It is focused on compounding capital over the long term to earn attractive total returns for its shareholders. Its operating segments include the asset management business and insurance solutions business. Its operating businesses include Renewable Power and Transition business, which includes the ownership, operation, and development of hydroelectric, wind, utility-scale solar power generating assets and distributed energy and sustainable solutions; Infrastructure business, which includes the ownership, operation and development of utilities, transport, midstream, and data assets; Private Equity business, which is focused on the ownership and operation of business services and industrial operations; Real Estate business , which includes the ownership, operation and development of core and transitional and development investments, and Corporate Activities, which include the investment of cash and financial assets.


TSX:BN - Post by User

Post by retiredcfon May 10, 2024 6:57am
97 Views
Post# 36032948

RBC Raise Target

RBC Raise Target

May 10, 2024

Outperform

NYSE: BN; USD 44.25

Price Target USD 53.00 ↑ 51.00

Brookfield Corporation

I thought I told you that we won't stop, I thought I told you that we won't stop

Our View: Just like BN said last quarter, they did not stop buying back stock and year-to-date have bought back >US$700MM of shares, adding ~US $0.50 of value per each remaining share. Furthermore, despite the discount to NAV continuing to narrow (now at 19% vs. mid-30s one year ago), it is still significant and why BN indicated it is likely to continue buying back stock. We have a positive view of Q1/24 results as Real Estate trends continue to improve; the Wealth/Insurance business is scaling up nicely; BAM is having strong fundraising performance; and improving monetization market conditions should improve NAV growth and the discount to NAV via surfacing value and driving higher realized carried interest. BN is our #3 best idea, reflecting positive trends and fundamentals and an attractive valuation (19% discount to NAV with the current share price implying an 84% discount to BN’s Real Estate assets). Increasing price target to US$53 (was US$51), maintaining Outperform.

Key points:

Q1/24 DE/share (before realized carried interest and disposition gains) of US$0.63 was slightly below our US$0.65 forecast, primarily due to higher- than-forecast corporate expenses. Q1/24 DE/share (including realizations) of US$0.77 was above our US$0.73 forecast.

Real Estate results continue to improve, having shown signs of stabilization in Q2/23 and Q3/23 with early signs of improvement in Q4/23 and Q1/24. Real Estate Q1/24 reported Operating FFO (OFFO) from Core and Transition & Development (T&D) was -US$18MM, which was better Y/Y vs. -US $22MM in Q1/23. Q1/24 NOI of US$827MM was also better Y/Y vs US $810MM in Q1/23.

Wealth/Insurance continued to see growth, with DE increasing +8% Q/ Q to US$273MM from US$253MM in Q4/23 and up +88% Y/Y from US $145MM in Q1/23. With the close of American Equity Life (AEL), BN thinks annualized DE increases from US$1.0B to US$1.4B and that over the next 18-24 months, this could reach US$2.0B annually as the investment portfolio is optimized. Current monthly new flows are ~US$800MM and BN thinks it could reach US$1.5B/month in the next 18-24 months.

Increasing 12-month target to US$53/share (was US$51), maintaining Outperform rating. The higher target reflects a higher-than-forecast Q1/24 NAV. Our NAV has been adjusted to include the recently closed AEL acquisition by BNRE.


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