In a research report released today, Canaccord analyst Mark Rothschild provided commentary and analysis on the second-quarter earnings results of Brookfield Asset Management Inc (NYSE:BAM), which were released this morning. The analyst rates BAM a Buy, with a $41.00 price target, which implies an upside of 19% from current levels.
Rothschild wrote, “Asset management fees continue to rise as Brookfield Asset Management (BAM) raises new funds and earns carried interest through harvesting existing funds. However, weak results from its residential property and renewable energy division more than offset and the company’s results were short of expectations. Including all gains, Brookfield Asset Management’s FFO per share for Q2/15 was $0.50, down 11% from $0.56 earned in the year-ago period. Excluding disposition gains of $171 million in the quarter, FFO per share was $0.32, down from $0.41 in the year-ago period, and below consensus of $0.46.”
Bottom line, “We believe that BAM is well positioned to continue to grow NAV and cash flow consistently through both its equity investments and its management fees. The company has been successful in raising new funds in both its property and infrastructure business and we expect management fees to rise as funds are invested. In addition, most of BAM’s equity investments are performing well and should lead to cash flow growth as its publicly traded subsidiaries grow cash flow and increase distributions.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Rothschild has a total average return of -1.1% and a 30.0% success rate. Rothschild has a -1.3% average return when recommending BAM, and is ranked #2750 out of 3728 analysts.