BROOKFIELD Analysis (BN)

2023年3月5日

📝 1. Introduction

Brookfield is a global asset company active in a variety of industries, including Renewable Power and Transition, Infrastructure, Private Equity, Real Estate, and Credit and Insurance Solutions.
With approximately 180,000 employees in more than 30 countries, the company has an extensive network of investments and operations around the world.

The correlation with the S&P 500 is close to 1:1 most of the time.
Given the company's scope in several sectors, its size and its history, it is important to put it on the table when carrying out a broad market analysis.

🧾 2. Fundamental Analysis



🔴 Analyzing the aspect of operating results, net revenue has been progressively falling since March 2022.
It is now practically at the same level as March 2020.
This reflects on the Earnings per Share, which is not following the Estimated Earnings per Share, indicating a possible excess of optimism on the part of analysts.
🤔 Will revenue drop to the same level as in June 2020?

🔴 Free cash flow is on the same path, at the same level as in March 2020 as well.

🟢 Looking at the P/E ("Price/Earnings"), we can see that the share price has become more expensive in relation to its earnings, giving a balance from the end of last year.
A higher P/E can be a result of a positive expectation for the company's growth.

🟢 The P/CF ("Price/Cash Flow") is signaling a recovery, indicating an increase in the share price in relation to its available cash, which may also corroborate an optimistic expectation for the company's growth.

🟢 Finally, looking at the Balance Sheet aspect, Shareholders' Equity continues on a constant upward trend, which demonstrates financial health.

🟡 Conclusion: Said that, I don't see any problem with this fundamentalist data.
My only point of attention is regarding net revenue, which is at the same levels as the start of the pandemic back in 2020.
Due to the increase in the cost of money, revenue may reach the same level as June 2020 or even worse. The X of the question is how much and when.

📈 3. Graphic Analysis

A buy in the region between $30 and $31 after an upward pivot becomes more attractive, offering a good risk/return ratio:


Another scenario that can develop, which is easier to visualize on the line graph, is a trading range within a triangle.
In this scenario, I think the price would break below the triangle to capture the bulls' stops, and only then begin an upward movement.