Credit Suisse Bullish On Brookfield Infrastructure

Credit Suisse has reinstated its coverage on Brookfield Infrastructure Partners L.P. (NYSE: BIP) with an Outperform rating and $59 target price, saying that Street underestimates the underlying organic growth from Brookfield's existing asset base along with increasing network benefits.

Apart from abundant M&A opportunities, the brokerage said the company's evolution is a much more visible organic growth profile coming from existing assets.

"This maturation lessens the need for M&A and highlights BIP's increasing network benefits that should provide greater financial and valuation clarity," analyst Andrew Kuske wrote in a note.

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The analyst expects Brookfield to generate double-digit FFO growth over the next three years, and projected FFO growth translates into an average of 10 percent distribution growth.

Kuske's $59 target price is obtained, in part, on a NAV along with an implied 4.0 percent distribution yield (200bps spread on an assumed 2.00 percent U.S. 10-year bond yield).

Units of Brookfield closed Monday's regular trading at $48.87. The $59 price target represents a potential upside of about 21 percent.

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