Brookfield (BAM) Continues to Execute on 2022 Plan as evidenced by 1Q2018 results.
As of 1Q2018 Fee Paying AUM increased to $127B, ENI for LTM increased to $2.1B, Annualized Fee Base and Target Carry increased to $2.5B and Cash Flow for LTM increased to $2.5B with $1B of Fee Related Earnings and $1.5B of Investment Income (from BPY/BIP/BEP/BBU and other Listed and Un-Listed Investments).
Mritik Capital expects Fee Related Earnings to grow 15% to 20% per year through 2022 and Investment Income to 10% per year through 2022 (aided by organic growth and new investments). This would imply Fee Related Earnings close to $2B and Investment Income of $2.5B which would imply $4.5 Cash EPS by 2022 end. We project BAM fair value to increase to $75+ by 2022 end.
Key value drivers over next few years would be GGP deal closing for BPY, Organic Growth and TerraFirm related growth for BEP, Organic Growth, NTS recapitalization and Major New Acquisitions for BIP, GrafTech and North American Palladiun Exits and Westinghouse turnaround for BBU and continuing strength in the Brookfield Homes business.
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