Bullboard - Stock Discussion Forum Brookfield Infrastructure Partners LP T.BIP.UN

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

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... see more

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NYSE:BIP - Post Discussion

Brookfield Infrastructure Partners LP > TD 2

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Post by retiredcf on Nov 03, 2022 9:20am

TD 2

Maintain their US$49.00 target. GLTA

Brookfield Infrastructure Partners L.P.

(BIP-N, BIP.UN-T) US$36.04

Q3/22 FFO/Unit a Slight Beat; Visible 2023 Earnings Growth Event

BIP reported Q3/22 FFO/unit of $0.68, a slight beat vs. the consensus estimate of $0.67, but in line with our forecast of $0.68.

Impact: SLIGHTLY POSITIVE

Strong Q3/22 Results: FFO/unit increased 15% y/y. Organic growth was a robust 10%, reflecting the benefit of ~6-7% inflation and the commissioning of ~$1.2bln of capital projects. Deployment of ~$2bln to M&A over the TTM also contributed.

Visible 2023 Earnings Growth: BIP is uniquely positioned to benefit from elevated inflation, which should continue into 2023, because 70-75% of EBITDA is inflation-linked, while 10-15% has pass-through mechanisms under fee-for- service models, such that periods of high inflation should drive margin expansion. BIP also has a near-record capex backlog, which provides a relatively low-risk and highly visible source of near- to medium-term growth. Furthermore, having invested/committed $2.8bln to new investments year-to-date, BIP has already largely achieved its M&A deployment targets for both 2022 and 2023 ($1.5bln/ year). And finally, BIP is well-positioned to weather higher interest rates/FX volatility, with ~90% of its debt long-term/fixed-rate (excluding Brazil) and 80%+ of its FFO denominated in/hedged to the U.S. dollar. BIP has previously guided to 2023 FFO/unit of $3.00+, which implies low-double-digit growth.

Value Investing Opportunities: Infrastructure valuations tend to be very resilient, but periods of market dislocation have historically enabled BIP to make deep- value acquisitions, e.g., BBI (2010) and NTS (2016). Such opportunities generally take several quarters to emerge, and, with strong visibility already in place for 2023, we see BIP as well-positioned to be patient.
Healthy Liquidity: BIP has $2.3bln of corporate liquidity, which should increase to ~$3bln following the completion of secured asset sales. The LP also has several asset sales processes underway that should generate a further $1.5bln. Three of the four secured asset sales are scheduled to close by year-end, and the businesses currently up for sale generally come with debt that is portable, which is a distinct advantage against this type of macro backdrop.

TD Investment Conclusion

We believe that BIP's high-quality and well-diversified portfolio of long-life infrastructure assets provides an attractive combination of offense and defense.