Take This Into Account Before Investing in Brookfield (BN)

Now trading at a price of $36.96, Brookfield has moved -0.6% so far today. In contrast, the S&P 500 index moved 0.8%. Read below for a basic value analysis of Series([], ).

Brookfield shares moved -17.6% over the last 52 weeks, with a high of $50.5 and a low of $29.85. During this time, the stock lagged the S&P 500 index by -5.2%. As of January 2022, the company's 50-day average price is $34.69. Brookfield Corporation is an alternative asset manager and REIT/Real Estate Investment Manager firm focuses on real estate, renewable power, infrastructure and venture capital and private equity assets. The Financial Services company has 180,000 full time employees and is based in Toronto, Canada. Brookfield has returned a 1.5% dividend yield over the last 12 months.

Snapshot of the Company's Consistent Operating Margins in Line With the 18.36% Industry Average:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $67,826 $62,752 $75,731
Revenue Growth n/a -7.48% 20.68%
Operating Margins 14.9% 15.1% 15.3%
Operating Margins Growth n/a 1.34% 1.32%
Net Margins 4.14% -0.21% 5.24%
Net Margins Growth n/a -105.07% 2595.24%
Earnings Per Share $1.73 -$0.12 $2.39
EPS Growth n/a -106.94% 2091.67%
Free Cash Flow (MM) $3,275 $4,329 $993
FCF Growth n/a 32.18% -77.06%
Capital Expenditures (MM) -$3,053 -$4,012 -$6,881
Net Debt / EBITDA 7.94 9.27 6.99

Brookfield Is Overvalued:

Compared to the Financial Services sector's average of 13.34, Brookfield has a trailing twelve month P/E ratio of 17.9 and, according to its EPS guidance of 4.41, an expected P/E ratio of 8.4. Brookfield 's PEG ratio is 0.03 based on its 690.0% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Brookfield's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.37, which implies that the company's shares might in fact be fairly valued.

Furthermore, Brookfield is likely undervalued in terms of its equity because its P/B ratio is 1.4 compared to its sector average of 1.95. The company's shares are currently trading 33.4% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 1.33 * 25.643) = $27.7

Brookfield Is the Subject of Mixed Market Indicators:

4 analysts are following Brookfield and have set target prices ranging from $42.57 to $83.81 per share. On average, they have given the company a rating of buy. At the current price of $36.96, BN is trading -41.91% away from its average analyst target price of $63.63 per share, implying an analyst consensus of strong upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.