On Monday, BMO Capital Markets adjusted its outlook on Brookfield Business Partners L.P. (NYSE:BBU) shares, increasing the price target to $31 from the previous $30 while maintaining an Outperform rating. The adjustment follows the company's recent financial disclosures.
The firm's analyst recognized that Brookfield Business Partners' earnings before interest, taxes, depreciation, and amortization (EBITDA) were impacted by a substantial cost reforecast within its construction segment. Despite this, the analyst believes that the core investments, which contribute significantly to the company's net asset value (NAV), have shown strong performance.
The analyst also noted the ongoing capital recycling initiatives by Brookfield Business Partners, hinting at the possibility of larger monetizations expected in the next 6 to 12 months. This, according to the analyst, may enhance the company's financial profile and benefit shareholders.
Brookfield Business Partners is perceived to have considerable leverage with respect to improvements in capital market conditions and transactional activity. This perspective supports the firm's positive rating on the stock, suggesting confidence in the company's potential to capitalize on favorable market developments.
The new price target of $31 reflects a modest increase from the previous target, indicating a continued bullish stance on the company's prospects by BMO Capital Markets. The Outperform rating is an affirmation of the analyst's expectation that Brookfield Business Partners will perform better than the overall market or sector in the foreseeable future.
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