Brookfield Infrastructure Partners LP BIP

TD

[retiredcf]

Have a US$49.00 target. GLTA

COMPANY UPDATE

INVESTOR DAY PREVIEW; ASSET MONETIZATION AND M&A ACTIVITY ARE RE- ACCELERATING

THE TD COWEN INSIGHT

An interest rate cutting cycle should be positive for the value of real assets, and BIP's unit- price. Asset monetization and large-scale M&A activity also appear to be re-accelerating, which we see as a potential catalyst. BIP yields ~5% and trades at 12.4x EV/2025E consensus EBITDA, which we see as a very modest multiple to pay for a high-quality, globally diversified infrastructure portfolio.

Event

BIP will host an Investor Day on Tuesday, September 24 in Toronto (link). Impact: NEUTRAL

Key Data

Asset Monetization Activity Ramping Up: Transaction velocity has been slow for ~18 months but seems to be re-accelerating. BIP hit its ~$2bln capital recycling target in 2023, despite a muted backdrop, and has raised $1.4bln YTD, including ~$400mm of asset sales, and ~$1bln of asset-level refinancings. As of Q2/24, BIP had three advanced sale processes underway and was progressing a further six, which are expected to generate ~$2.5bln of net proceeds over the coming quarters. Unconfirmed media reports (link) suggest that BIP is already considering the sale of minority stakes in some of Data4's stabilized assets, which we believe is a potential positive catalyst for the unit price, because the transaction economics should showcase the embedded value in BIP's leading global hyperscale data center platform, and affirm the viability of the LP's plan to self-fund much of its future data center capex by selling minority interests in fully operating/contracted data centers. We have also learned from the media that PD Ports is on the market; this is also unconfirmed by the company (link). PD Ports is a large and very high-quality asset, in our view, and we anticipate that a successful transaction would return several hundred million dollars to BIP.