Is Brookfield Infrastructure Partners LP (BIP) overvalued?
On Equity Rank's model estimate, BIP trades 12% above its fair value. Brookfield Infrastructure Partners LP (BIP) last closed at $39.45; the multi-method model fair value is $35.14.
| Price | Model fair value | Price vs model |
|---|---|---|
| $39.45 | $35.14 | 12% above |
What the answer rests on
- 2 of 10 valuation methods put BIP's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, BIP's free cash flow would need to grow about 35.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -12.3% a year.
- BIP trades at 61.6 times its last year's earnings, against a median of 21.1 for 66 profitable Utilities companies.
- Over the past year the price sat below the model fair value on 77% of trading days. The gap ranged from 15% below to 20% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BIP's fair value · What prices assume · Other companies