CA - Brookfield Asset Management: Growth Is Down As Expected Will The Price Hold Up?
2024-03-22 13:11:09 ET
Summary
- Brookfield Asset Management reported sluggish performance, with fee-related earnings growth slowing to 6% YoY.
- Low management fees from daughter funds Brookfield Infrastructure Partners and Brookfield Renewable Partners were a major factor in the decline.
- BAM may struggle to hit its double-digit earnings growth target in 2024 and the stock is overvalued at a multiple of 31x fee-related earnings.
Dear readers,
In early November, I published a controversial piece on Brookfield Asset Management ( BAM ). I had been bullish on BAM and the stock represented one of my biggest positions, but when I learned that (1) distributions from Brookfield's daughter funds (Brookfield Infrastructure Partners - BIP and Brookfield Renewable Partners - BEP ) may not be covered by cash FFO and especially that (2) the management fees received from BIP and BEP are effectively tied to the market cap of those funds, I flipped bearish and issued a SELL rating at $30 per share....
Brookfield Asset Management: Growth Is Down As Expected, Will The Price Hold Up?