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Brookfield Business Partners LP (TSE:BBU.UN)
TSX:BBU.UN
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Brookfield Business Partners
(TSX:BBU.UN)
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Rating:50Neutral
Price Target:
C$47.00
▲(12.79% Upside)
Action:ReiteratedDate:01/30/26
The score is held back primarily by weak financial fundamentals (declining revenue, negative profitability, and very high leverage) and bearish near-term technical signals. These are partly offset by constructive earnings-call takeaways around strong liquidity, active capital recycling/debt reduction, buybacks, and demonstrated operational value creation at key portfolio companies, with valuation support limited by a negative P/E.
Positive Factors
Operational value creation at portfolio companies
Substantial, sustained EBITDA improvements at Clarios and Nielsen indicate genuine operational leverage and integration capability across acquisitions. This drives durable margin expansion, stronger recurring cash flows, and greater capacity to fund growth or reduce leverage over multiple years.
Strong liquidity and active capital recycling
Maintaining several billion in corporate liquidity and converting assets to cash through disciplined recycling provides durable optionality. It lowers refinancing risk, supports opportunistic acquisitions or buybacks, and cushions the portfolio versus cyclical downturns over the medium term.
Improved financing terms and interest savings
Lowered financing costs and completed large refinancings materially reduce cash interest expense and increase free cash flow persistence. These structural savings improve coverage metrics, ease deleveraging paths, and enhance resilience to rate volatility over multiple reporting periods.
Negative Factors
Very high leverage ratio
An extremely elevated debt-to-equity position creates structural vulnerability to higher rates or weaker cash flow. Heavy reliance on debt limits financial flexibility, increases default and refinancing risks, and constrains capital allocation priorities for deleveraging and long-term value creation.
Declining revenue and negative net profitability
Sustained revenue declines combined with net losses undermine persistent free cash generation and mean reported earnings remain volatile. Even with solid EBITDA margins, negative net profitability pressures retained earnings and limits ability to self-fund investments and debt reduction.
Reduced consolidated EBITDA from partial dispositions and end-market softness
Lower reported EBITDA from disposals and weaker end markets indicates structural variability in cash flow scale and predictability. Partial sales reduce recurring ownership income, making future EBITDA growth more reliant on successful new investments or organic recovery in cyclical regions.
Brookfield Business Partners (BBU.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.70B
Dividend Yield0.72%
Average Volume (3M)28.07K
Price to Earnings (P/E)―
Beta (1Y)1.91
Revenue Growth-36.15%
EPS Growth-122.76%
CountryCA
Employees72,000
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)-0.04
Shares Outstanding88,675,930
10 Day Avg. Volume30,139
30 Day Avg. Volume28,072
Financial Highlights & Ratios
PEG Ratio-1.08
Price to Book (P/B)0.99
Price to Sales (P/S)0.04
P/FCF Ratio2.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$58.59Price Target Upside40.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)2.36
Revenue Forecast (FY)C$17.85B
Brookfield Business Partners Business Overview & Revenue Model
Company DescriptionBrookfield Business Partners L.P. is a private equity firm specializes in acquisition. The firm typically invests in business services, construction, energy, and industrials sector. It prefers to take majority stake in companies. The firm seeks returns of at least 15% on its investments. Brookfield Business Partners L.P. is based in Hamilton, Bermuda. Brookfield Business Partners L.P. operates as a subsidiary of Brookfield Asset Management Inc.
How the Company Makes MoneyBrookfield Business Partners generates revenue primarily through the acquisition and management of businesses across various sectors. Its revenue model includes fees for managing investments, performance fees based on the success of its portfolio companies, and dividends received from its investments. Key revenue streams come from operational improvements in acquired companies, strategic asset sales, and periodic realizations of investments. The company also benefits from partnerships with other investment firms and institutional investors, which provide additional capital and co-investment opportunities, further contributing to its earnings.
Brookfield Business Partners Earnings Call Summary
Earnings Call Date:Jan 30, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 01, 2026
Earnings Call Sentiment Positive
The call highlighted strong execution on capital recycling, disciplined deployment, improved financing terms, and meaningful operational value creation at key portfolio companies (notably Clarios and Nielsen). Industrial and same-store Business Services performance showed healthy growth, liquidity is strong (~$2.6B), and management is progressing a corporate reorganization to improve market access. Offsetting these positives were a decline in consolidated adjusted EBITDA (down ~7.7% YoY) driven by lower ownership following partial dispositions, persistent regional/end-market softness (notably in parts of Europe), volume weakness in select businesses (Dexco, modular leasing), and near-term costs from technology investments. Tax credit timing and a credit rating downgrade at Scientific Games are additional near-term uncertainties. Overall, the highlights materially outweigh the lowlights given the balance-sheet strength, active capital allocation, and demonstrated operational improvements.Q4-2025 Updates
Positive Updates
Strong Capital Recycling and Balance Sheet Actions
Generated more than $2.0 billion of proceeds from capital recycling, repaid roughly $1.0 billion of corporate borrowings, and completed over $20.0 billion of financings across operations (extending maturities and improving terms). Ended the year with approximately $2.6 billion of pro forma corporate-level liquidity.
Active, Disciplined Capital Deployment
Invested $700 million in four growth acquisitions during the year and repurchased approximately $235 million of units/shares at an average price of ~$26, with commitment to complete a $250 million buyback program and remain opportunistic thereafter.
Improved Financing Costs and Interest Savings
Refinancings reduced the cost of refinanced borrowings by over 50 basis points, and two refinancings at Nielsen combined with debt paydown are expected to yield about $90 million of annual interest savings.
Industrial Segment Outperformance
Industrial segment adjusted EBITDA of $1.3 billion versus $1.2 billion last year (up ~8.3% YoY); excluding acquisitions, dispositions and tax benefits, segment performance increased ~10% YoY, driven by advanced energy (higher‑margin batteries) and engineered components margin improvements.
Operational Value Creation at Portfolio Companies (Clarios & Nielsen)
Clarios: underlying annual EBITDA increased 40% (nearly $700 million) since acquisition and is investing to scale recycling and manufacturing; Nielsen: executed ~$800 million of cost savings since acquisition (including >$250 million in the past year), improving EBITDA margins by >350 basis points.
Business Services Same-Store Improvement
Business Services segment generated full-year adjusted EBITDA of $823 million (vs $832 million prior year), with same-store adjusted EBITDA up approximately 5% driven by stabilization at mortgage insurance and commercial initiatives in dealer software and lottery services.
Share Price Momentum and Corporate Reorganization
Trading price is ~50% higher year-over-year and management is progressing a corporate reorganization to convert to a single newly listed corporation to improve liquidity and broaden investor access.
Scientific Games Operational Progress
Sequential pickup in earnings with a successful UK market launch and a strong project pipeline; management expects commercialization to translate into earnings over a 6–12 month horizon, supporting the growth-led deleveraging thesis.
Negative Updates
Decline in Consolidated Adjusted EBITDA
Full-year adjusted EBITDA was $2.4 billion compared to $2.6 billion in 2024, a decline of approximately 7.7%, reflecting lower ownership in three businesses following partial sales and other timing/accounting impacts.
Segment and End-Market Headwinds
Europe remains challenged with slower activity in cyclical/industrial end markets (including construction and CapEx‑sensitive manufacturing); certain businesses faced weaker end-market conditions that constrained growth.
Volume Weakness at Dexco and Modular Leasing
Dexco experienced lower volumes for the year (though full-year EBITDA was up low single digits and margins held at acquisition levels); modular building leasing saw lower activity and fleet utilization, partially offset by value‑added services growth.
Partial Dispositions Reduced Reported Ownership and EBITDA
Adjusted EBITDA was impacted by lower ownership in three businesses following the partial sale of interests, and there were specific one-time impacts (e.g., $14 million related to sale of partial interest in work access services).
Timing Uncertainty Around Tax Credits
Clarios’ 45x production tax credits (~$297 million recognized this year vs $271 million prior) are being processed and while management is confident of qualification, the timing of cash receipt is uncertain and insured as a backup.
Scientific Games Credit Rating Downgrade and Leverage Considerations
Scientific Games experienced a credit rating downgrade; while management expects growth to delever the business, the downgrade highlights near-term financing/credit risks and the balance between growth investments and leverage reduction.
Ongoing Investment Costs at Technology Operations
CDK and other technology modernization programs require continued investment into 2026, which will drive near-term costs as adoption ramps and product rollout continues, tempering immediate margin gains.
Shares Still Trading Below Intrinsic Value
Despite a ~50% year-over-year share price increase, the stock continues to trade at a material discount to management’s view of NAV (analyst reference to ~$54 NAV), indicating unrealized valuation gap versus intrinsic value.
Company Guidance
Management's guidance was that Brookfield Business Partners enters 2026 with strong liquidity and optionality — roughly $2.6 billion of pro forma corporate liquidity — after generating more than $2.0 billion of proceeds from capital recycling, repaying roughly $1.0 billion of corporate borrowings, investing $700 million in four growth acquisitions, and repurchasing approximately $235 million of units/shares (at an average price of about $26) toward a committed $250 million buyback; they reported full‑year adjusted EBITDA of $2.4 billion (versus $2.6 billion in 2024) with Industrial segment EBITDA of $1.3 billion (up from $1.2 billion) and Business Services EBITDA of $823 million (same‑store EBITDA +~5%), noted 297 million of tax credits (vs. $271 million prior), highlighted portfolio wins such as Clarios (underlying annual EBITDA up ~40% or almost $700 million since acquisition and a path to similar growth over the next five years) and Nielsen (about $800 million of cost savings since acquisition, including >$250 million this year, >350 bps margin improvement and ~$90 million of annual interest savings), called out having completed more than $20 billion of financings (reducing refinancing costs by >50 bps), and reiterated a planned corporate reorganization to a single listed corporation (pending regulatory approval) while noting the stock is ~50% higher year‑over‑year but still materially below reported NAV (about $54).Brookfield Business Partners Financial Statement Overview
Summary
Revenue declined (-7.68% TTM) and net margin is negative, while leverage is very high (debt-to-equity 18.40) and ROE is negative. Offsetting factors include relatively solid EBIT/EBITDA margins (14.64%/23.07%) and positive operating cash flow, though free cash flow fell (-24.95% TTM).Income Statement
Brookfield Business Partners has faced challenges in maintaining revenue growth, with a negative growth rate of -7.68% in the TTM period. The gross profit margin stands at 18.90%, which is moderate, but the net profit margin is negative, indicating profitability issues. The EBIT and EBITDA margins are relatively healthy at 14.64% and 23.07% respectively, suggesting operational efficiency despite the net loss.45
Neutral
Balance Sheet
The company exhibits a high debt-to-equity ratio of 18.40, indicating significant leverage and potential financial risk. The return on equity is negative, reflecting the net loss and challenges in generating returns for shareholders. The equity ratio is low, suggesting a heavy reliance on debt financing.40
Negative
Cash Flow
Operating cash flow remains positive, but free cash flow has declined by 24.95% in the TTM period. The operating cash flow to net income ratio is 0.16, indicating some cash generation capability despite the net loss. The free cash flow to net income ratio is positive, suggesting some level of cash flow resilience.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.79B | 40.62B | 53.05B | 57.38B | 46.59B | 37.63B |
| Gross Profit | 5.25B | 5.74B | 2.12B | 4.28B | 3.44B | 3.00B |
| EBITDA | 6.09B | 7.67B | 6.29B | 6.14B | 4.71B | 4.20B |
| Net Income | -108.00M | 15.00M | 482.00M | 63.00M | 258.00M | -91.00M |
Balance Sheet | ||||||
| Total Assets | 75.33B | 75.47B | 81.96B | 89.21B | 64.13B | 54.75B |
| Cash, Cash Equivalents and Short-Term Investments | 4.28B | 4.03B | 4.04B | 4.44B | 4.39B | 5.12B |
| Total Debt | 44.69B | 39.81B | 45.29B | 50.59B | 33.10B | 27.39B |
| Total Liabilities | 59.80B | 58.17B | 63.53B | 70.79B | 51.15B | 43.41B |
| Stockholders Equity | 2.35B | 1.75B | 1.90B | 1.41B | 2.25B | 1.93B |
Cash Flow | ||||||
| Free Cash Flow | 1.42B | 724.46M | -158.00M | -737.00M | 243.00M | 2.80B |
| Operating Cash Flow | 3.51B | 3.12B | 2.13B | 1.01B | 1.69B | 4.21B |
| Investing Cash Flow | -2.09B | -2.22B | 2.54B | -18.72B | -8.93B | -2.33B |
| Financing Cash Flow | -850.19M | -480.75M | -4.37B | 18.07B | 7.06B | -1.08B |
Brookfield Business Partners Technical Analysis
Negative
41.67
Price Trends
47.03
Negative
47.34
Negative
42.82
Negative
Market Momentum
-1.74
Positive
33.37
Neutral
19.35
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BBU.UN, the sentiment is Negative. The current price of 41.67 is below the 20-day moving average (MA) of 44.68, below the 50-day MA of 47.03, and below the 200-day MA of 42.82, indicating a bearish trend. The MACD of -1.74 indicates Positive momentum. The RSI at 33.37 is Neutral, neither overbought nor oversold. The STOCH value of 19.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:BBU.UN.
Brookfield Business Partners Risk Analysis
Brookfield Business Partners disclosed 1 risk factors in its most recent earnings report. Brookfield Business Partners reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brookfield Business Partners Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | C$5.67B | 25.57 | 10.61% | 3.13% | 15.47% | 9.40% | |
67 Neutral | C$665.88M | 18.25 | 10.28% | 7.14% | 6.88% | -13.39% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | C$2.10B | 29.89 | 24.10% | 0.99% | 13.02% | 52.88% | |
60 Neutral | C$4.18B | 30.95 | -0.27% | ― | -5.59% | -104.09% | |
59 Neutral | C$4.63B | 31.34 | 11.37% | 2.27% | -1.47% | -79.68% | |
50 Neutral | C$3.70B | -18.22 | -0.60% | 0.72% | -36.15% | -122.76% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.