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Brookfield Business Partners LP (TSE:BBU.UN)
TSX:BBU.UN
RESEARCH TOOLSreports
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Brookfield Business Partners
(TSX:BBU.UN)
61Neutral
Positive Factors
Capital Management
BBU has been active on its US$250m NCIB program, executing on US$140m year-to-date, and management plans to renew its NCIB.
Earnings
Two of BBU’s largest EBITDA contributors, Clarios and Sagen, continue to shine.
Financial Performance
BBU offers a unique way to gain private equity exposure without liquidity constraints, supported by a solid investment return track record and attractive valuation.
Negative Factors
Debt Structure
Healthscope results beat expectations, but its performance continues to be under pressure with an unsustainable elevated debt structure.
Valuation
The portfolio value remains underappreciated and the potential return to investors is significant.
Brookfield Business Partners (BBU.UN) vs. S&P 500 (SPY)
Market Cap
$3.22B
Dividend Yield0.98%
Average Volume (3M)52.70K
Price to Earnings (P/E)2.8
Beta (1Y)1.87
Revenue Growth-20.99%
EPS Growth-108.53%
CountryCA
Employees72,000
SectorIndustrials
Sector Strength91
IndustryConglomerates
Share Statistics
EPS (TTM)0.52
Shares Outstanding89,376,396
10 Day Avg. Volume67,070
30 Day Avg. Volume52,698
Financial Highlights & Ratios
PEG Ratio1.29
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio-1.87
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$43.54Price Target Upside20.95% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
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 makes money primarily through acquiring and managing a diverse array of businesses across various industries. The company generates revenue from its operations in sectors such as construction, energy, and industrials by improving the efficiency and profitability of the businesses it acquires. Additionally, BBU.UN benefits from its strategic partnerships and investment opportunities, which contribute to its earnings. The company’s revenue streams are diversified across its portfolio, reducing dependence on any single business or sector, and it often seeks to create value through operational improvements, strategic repositioning, and financial restructuring of the businesses it owns.
Brookfield Business Partners Financial Statement Overview
Summary
Brookfield Business Partners is facing a challenging financial landscape. While operational efficiency has improved, as seen in better margins, revenue decline and high leverage are major concerns. The company needs to address its high debt levels and improve cash flow stability to ensure long-term financial health.Income Statement
The company's income statement shows mixed performance. Revenue has decreased from the previous year, indicating a negative revenue growth rate. However, the gross profit margin improved to 9.16% from 7.72% in 2022. The net profit margin for 2023 is 0.88%, showing a slight improvement over the previous year's 0.62%. The EBIT margin has improved significantly to 6.37% from a negative margin in 2022, indicating better operational efficiency. The EBITDA margin is robust at 12.90%, suggesting strong earnings before interest, taxes, depreciation, and amortization.65
Positive
Balance Sheet
The balance sheet presents some concerns. The debt-to-equity ratio has increased significantly to 23.84 from 2.75 in 2022, indicating high leverage and potential financial risk. Return on equity has decreased dramatically to 25.25% from 1.92%, showing poor utilization of equity. The equity ratio has dropped to 2.32%, down from 20.63% in 2022, indicating a decline in the proportion of assets funded by shareholders' equity.40
Negative
Cash Flow
Cash flow analysis indicates challenges. The free cash flow for 2023 is negative, but the free cash flow growth rate improved significantly from the previous year's negative figure. The operating cash flow to net income ratio is 4.42, suggesting better cash conversion. However, the free cash flow to net income ratio is negative, highlighting ongoing cash flow issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 40.62B | 55.07B | 57.55B | 46.59B | 37.63B | Gross Profit |
| 5.74B | 5.05B | 4.44B | 3.44B | 5.17B | EBIT |
| 4.47B | 3.51B | -226.00M | -1.24B | 2.03B | EBITDA |
| 7.67B | 7.10B | 5.42B | 1.04B | 4.19B | Net Income Common Stockholders |
| 15.00M | 482.00M | 355.00M | 2.15B | 580.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.03B | 3.84B | 2.87B | 2.59B | 2.74B | Total Assets |
| 75.47B | 82.39B | 89.50B | 64.22B | 54.75B | Total Debt |
| 39.79B | 45.52B | 50.78B | 29.08B | 23.78B | Net Debt |
| 36.55B | 42.27B | 47.91B | 26.49B | 21.03B | Total Liabilities |
| 58.17B | 63.85B | 71.03B | 51.22B | 43.41B | Stockholders Equity |
| 0.00 | 1.91B | 18.46B | 13.00B | 11.34B |
| Cash Flow | Free Cash Flow | |||
| 761.00M | -158.00M | -737.00M | 243.00M | 2.80B | Operating Cash Flow |
| 3.28B | 2.13B | 1.01B | 1.69B | 4.21B | Investing Cash Flow |
| -2.33B | 2.54B | -18.72B | -8.93B | -2.33B | Financing Cash Flow |
| -505.00M | -4.37B | 18.07B | 7.06B | -1.08B |
Brookfield Business Partners Technical Analysis
Positive
36.00
Price Trends
31.60
Positive
32.30
Positive
31.70
Positive
Market Momentum
1.18
Negative
69.14
Neutral
93.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BBU.UN, the sentiment is Positive. The current price of 36 is above the 20-day moving average (MA) of 31.28, above the 50-day MA of 31.60, and above the 200-day MA of 31.70, indicating a bullish trend. The MACD of 1.18 indicates Negative momentum. The RSI at 69.14 is Neutral, neither overbought nor oversold. The STOCH value of 93.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$1.40B | 13.96 | 26.31% | 2.67% | 16.14% | 27.71% | |
76 Outperform | C$3.31B | 17.43 | 16.22% | 2.79% | 13.51% | -58.43% | |
72 Outperform | C$3.19B | 32.12 | 8.54% | ― | 49.98% | 108.76% | |
70 Outperform | C$2.99B | 22.49 | 9.16% | 4.54% | 5.95% | -1.42% | |
64 Neutral | $4.44B | 11.99 | 5.16% | 249.23% | 4.01% | -11.87% | |
61 Neutral | $3.22B | 2.83 | -1.19% | 0.98% | -20.99% | -108.53% |
* Industrials Sector Average
Performance Comparison
TSE:BBU.UN
Brookfield Business Partners
36.00
9.70
36.89%
BADFF
Badger Infrastructure Solutions
31.50
1.29
4.27%
TSE:BDT
Bird Construction
25.31
4.67
22.63%
TSE:EIF
Exchange Income
58.18
13.90
31.39%
TSE:SES
Secure Energy Services
14.34
3.29
29.77%
TSE:MDA
MDA Ltd
26.11
13.60
108.71%
Brookfield Business Partners Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: 20.56%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Neutral
The earnings call highlights several positive achievements, such as strong capital recycling, significant unit buyback, and positive EBITDA growth. However, there are challenges in specific segments like Infrastructure Services and Engineered Components, alongside concerns over tariffs and trade policies. Despite these issues, the proactive measures and strategic investments position the company well for future growth.Q1-2025 Updates
Positive Updates
Strong Capital Recycling and New Acquisitions
Generated over $1.5 billion from capital recycling initiatives and committed $370 million to acquire two market-leading industrial businesses.
Significant Unit Buyback
Reduced corporate borrowings and bought back nearly six million units and shares, returning $140 million to shareholders as part of a $250 million repurchase program.
Positive EBITDA Growth
First quarter adjusted EBITDA was $591 million, an increase from $544 million in the prior period.
Successful Strategic Investments
Reached an agreement to acquire Antylia Scientific, a leading manufacturer in life sciences and environmental labs, with opportunities for growth and improvement.
Strong Industrial Segment Performance
Industrial segment generated first quarter adjusted EBITDA of $304 million, aided by tax benefits and demand for higher-margin advanced batteries.
Negative Updates
Challenges in Engineered Components Sector
End market weakness and lower volumes impacted the engineered components manufacturer, necessitating active cost management to support margins.
Softness in Infrastructure Services Segment
First quarter adjusted EBITDA in Infrastructure Services decreased from $143 million to $104 million, affected by weak market conditions in work access services.
Tariff and Trade Policy Concerns
Uncertainty around tariffs and trade policies poses risks, particularly for DexKo and Clarios, although impacts are expected to be manageable.
CDK Global Churn
Higher churn in CDK's single product customers, though core customers appear more stable, impacting year-over-year performance.
Company Guidance
During the first quarter of 2025, Brookfield Business Partners reported significant progress in several areas, as highlighted in their recent conference call. The company generated over $1.5 billion from capital recycling initiatives and allocated $370 million to acquire two leading industrial businesses. They also reduced corporate borrowings and bought back nearly six million units and shares, spending $140 million as part of a $250 million repurchase program. The company's adjusted EBITDA for the quarter was $591 million, up from $544 million in the previous period, while adjusted EFO stood at $345 million. Segment performance was notable, with the Industrial segment contributing $304 million in adjusted EBITDA and the Business Service segment generating $213 million. The Infrastructure Services segment, however, saw a decrease to $104 million from $143 million the previous year. Brookfield continues to focus on enhancing operational capabilities, preparing for potential economic uncertainties, and leveraging growth opportunities in regions like the U.S., Europe, India, and the Middle East.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.