DCF Studio

    BIP-UN.TO · TOR · Utilities

    Brookfield Infrastructure Partners L.P.

    Also onConsensus Drift

    Implied value per share

    CAD 314.92

    Market price

    CAD 50.40

    Implied upside

    +524.8%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.3982

    AdjustedReports in USD, trades in CAD. Modelled in USD, converted at the end.
    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    AdjustedCapital expenditure runs at 20.7% of revenue against depreciation of 16.2%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 314.92+524.8%
    Exit multiple
    CAD 368.58+631.3%
    Market price
    CAD 50.40

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 27.0bnUSD 31.6bnUSD 37.0bnUSD 43.3bnUSD 50.6bn+17.0%
    EBITUSD 6.4bnUSD 7.5bnUSD 8.8bnUSD 10.3bnUSD 12.1bn+17.0%
    NOPATUSD 4.9bnUSD 5.7bnUSD 6.7bnUSD 7.9bnUSD 9.2bn+17.0%
    Add depreciation & amortisationUSD 4.4bnUSD 5.1bnUSD 6.0bnUSD 7.0bnUSD 8.2bn+17.0%
    Less capital expenditureUSD -5.6bnUSD -6.5bnUSD -7.7bnUSD -9.0bnUSD -10.5bn+17.0%
    Less increase in working capitalUSD -714.6mUSD -836.0mUSD -978.0mUSD -1.1bnUSD -1.3bn+17.0%
    Free cashflow to firmUSD 3.0bnUSD 3.5bnUSD 4.1bnUSD 4.8bnUSD 5.6bn+17.0%
    Discount factor0.97160.91730.86600.81760.7719-
    Present valueUSD 2.9bnUSD 3.2bnUSD 3.5bnUSD 3.9bnUSD 4.3bn+10.4%
    Present Value Of The ForecastUSD 17.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.007Reported 1.011, pulled toward 1.0 (Blume)
    Cost of equity8.84%Risk-free + beta x equity risk premium
    Cost of debt5.56%Interest expense / average total debt
    Market capitalisationUSD 39.9bn36.6% of capital
    Total debtUSD 69.1bn63.4% of capital, book value as a proxy
    Tax rate23.8%Effective, capped at statutory
    WACC5.92%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 225.23

    89% of EV

    Forecast FCFF, final year
    USD 5.6bn
    Capex at depreciation, working capital in reinvestment
    USD 10.8bn
    Less reinvestment at g/ROIC (38.6% of NOPAT)
    USD -4.2bn
    Capitalised
    USD 6.6bn
    ROIC (reported)
    6.5%
    Terminal value, undiscounted
    USD 197.6bn
    Terminal value, discounted
    USD 152.5bn
    Enterprise value
    USD 170.4bn
    Less net debt
    USD 66.8bn
    Equity value
    USD 103.6bn

    Exit at 10.9x EBITDA

    Value per shareUSD 263.61

    90% of EV

    Terminal value, undiscounted
    USD 220.5bn
    Terminal value, discounted
    USD 170.2bn
    Enterprise value
    USD 188.1bn
    Less net debt
    USD 66.8bn
    Equity value
    USD 121.3bn

    Spread between methods: 16%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.92%528.20615.99764.391071.842101.67
    4.92%323.55348.62383.43435.59523.36
    5.92%211.74217.81225.23234.72247.55
    6.92%146.29147.54148.79150.04151.29
    7.92%104.28105.33106.38107.42108.47

    Outlined: this model. Green text: above today's price of 36.05. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year17.0%0.0%-17.0pp
    EBIT margin23.8%10.9%-13.0pp
    Discount rate5.9%10.5%+4.5pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.