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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:53Neutral
Price Target:
C$50.00
▼(-0.54% Downside)
Brookfield Business Partners' overall stock score is primarily influenced by its challenging financial performance, marked by declining revenues and high leverage. While technical indicators show a positive trend, the valuation remains unattractive due to a negative P/E ratio. The earnings call provided some optimism with strategic initiatives, but financial and operational challenges persist.
Positive Factors
Capital Recycling Program
The capital recycling program enhances liquidity and financial flexibility, allowing the company to reinvest in growth opportunities and reduce debt, supporting long-term stability.
Strategic Growth Acquisitions
These acquisitions expand market reach and operational efficiency, positioning the company for sustained growth and competitive advantage in key sectors.
Corporate Structure Simplification
Simplifying the corporate structure can enhance market perception, improve liquidity, and support a higher market valuation, benefiting long-term shareholder value.
Negative Factors
High Leverage
High leverage increases financial risk, potentially limiting the company's ability to invest in growth and affecting its long-term financial health.
Decline in Adjusted EBITDA
A decline in EBITDA indicates reduced profitability and operational challenges, which could impact the company's ability to fund future growth initiatives.
Regulatory Challenges
Regulatory challenges can affect business operations and reputation, potentially leading to increased compliance costs and impacting long-term strategic execution.
Brookfield Business Partners (BBU.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$4.31B
Dividend Yield0.72%
Average Volume (3M)19.82K
Price to Earnings (P/E)―
Beta (1Y)2.03
Revenue Growth-36.15%
EPS Growth-122.76%
CountryCA
Employees72,000
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)-0.40
Shares Outstanding88,675,930
10 Day Avg. Volume28,856
30 Day Avg. Volume19,818
Financial Highlights & Ratios
PEG Ratio-1.08
Price to Book (P/B)0.99
Price to Sales (P/S)0.04
P/FCF Ratio2.29
Enterprise Value/Market Cap10.83
Enterprise Value/Revenue1.68
Enterprise Value/Gross Profit8.89
Enterprise Value/Ebitda7.66
Forecast
1Y Price Target
$51.98Price Target Upside3.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)4.18
Revenue Forecast (FY)$33.10B
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:Nov 10, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jan 30, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in capital recycling, strategic acquisitions, and corporate restructuring, indicating strong future potential. However, challenges in EBITDA performance and specific segments, along with regulatory issues, present concerns. Overall, the positive strategic progress is tempered by notable financial and operational challenges.Q3-2025 Updates
Positive Updates
Capital Recycling Program Success
Generated more than $2 billion from capital recycling, repaid $1 billion of borrowings, and bought back over $160 million of units and shares.
Strategic Growth Acquisitions
Invested $525 million in three strategic growth acquisitions, including First National, Chemelex, and Antylia Scientific, enhancing operational efficiency and expanding market reach.
Corporate Structure Simplification
Announced plans to simplify corporate structure, improving trading liquidity and increasing market cap by nearly $1 billion.
Strong Segment Performance
Industrial segment performance increased 17% year-over-year, driven by advanced energy storage and engineered components, despite partial sales of interests.
Positive Market Reception
Positive feedback for corporate reorganization, leading to increased market cap and potential for future growth.
Negative Updates
Decline in Adjusted EBITDA
Third quarter adjusted EBITDA decreased from $844 million to $575 million year-over-year, impacted by lower ownership in businesses and reduced tax benefits.
Business Services Segment Challenges
EBITDA for Business Services dropped from $228 million to $188 million due to the partial sale of interests and strategic investments affecting short-term financials.
Infrastructure Services Segment Decline
Infrastructure Services adjusted EBITDA fell from $146 million to $104 million, reflecting the sale of offshore oil services and partial interests, impacting segment stability.
Regulatory Challenges for La Trobe
La Trobe faced regulatory issues affecting disclosure, with potential implications for business perception and operations.
Company Guidance
During the Brookfield Business Partners Third Quarter 2025 Results Conference Call, the company reported significant financial metrics and strategic initiatives. Since the beginning of the year, Brookfield has generated over $2 billion from its capital recycling program and repaid $1 billion in corporate credit facility borrowings. The company also repurchased $160 million worth of units and shares and invested $525 million in strategic growth acquisitions. In terms of market performance, the reorganization plans announced in September have led to a nearly $1 billion increase in market capitalization. The company's shares have appreciated approximately 150% over the past two years, reflecting a narrowed trading discount to NAV, which continues to grow. Financial results for the third quarter showed an adjusted EBITDA of $575 million, down from $844 million in the prior period, with tax benefits contributing $77 million. Despite lower ownership in some businesses, adjusted EBITDA excluding tax benefits stood at $512 million, compared to $501 million previously. The Industrial segment's adjusted EBITDA was $316 million, while the Business Services and Infrastructure Services segments reported $188 million and $104 million, respectively. The company ended the quarter with approximately $2.9 billion in pro forma liquidity, positioning it well for future growth and capital allocation priorities.Brookfield Business Partners Financial Statement Overview
Summary
Brookfield Business Partners is facing challenges with declining revenues and profitability pressures. The high leverage poses financial risks, although operational efficiency remains a strength. Cash flow generation is under pressure, but there is some resilience in free cash flow relative to net income.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 | 75.40B | 75.47B | 81.96B | 89.21B | 64.13B | 54.75B |
| Cash, Cash Equivalents and Short-Term Investments | 3.50B | 4.03B | 4.04B | 4.44B | 4.39B | 5.12B |
| Total Debt | 43.30B | 39.81B | 45.29B | 50.59B | 33.10B | 27.39B |
| Total Liabilities | 59.86B | 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
Positive
50.27
Price Trends
47.66
Positive
45.42
Positive
39.36
Positive
Market Momentum
0.24
Positive
57.94
Neutral
58.90
Neutral
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 50.27 is above the 20-day moving average (MA) of 48.83, above the 50-day MA of 47.66, and above the 200-day MA of 39.36, indicating a bullish trend. The MACD of 0.24 indicates Positive momentum. The RSI at 57.94 is Neutral, neither overbought nor oversold. The STOCH value of 58.90 is Neutral, 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | C$4.88B | 31.00 | 9.88% | 3.13% | 15.47% | 9.40% | |
67 Neutral | C$603.29M | 21.91 | 10.28% | 7.14% | 6.88% | -13.39% | |
66 Neutral | C$2.61B | 30.68 | 22.05% | 0.99% | 13.02% | 52.88% | |
66 Neutral | C$4.10B | -788.87 | -0.27% | ― | -5.59% | -104.09% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | C$3.75B | 38.07 | 11.37% | 2.27% | -1.47% | -79.68% | |
53 Neutral | $4.31B | -20.09 | -6.18% | 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.