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Alternative Investment

Brookfield Asset Management gets Buy rating at Goldman after spinoff (NYSE:BAM)

Seesaw Showing Imbalance Between Risk And Reward


Brookfield Asset Management (NYSE:BAM) shares gained 2.9% in Tuesday premarket trading after Goldman Sachs analyst Alexander Blostein initiated coverage of the stock with a Buy rating.

“We view BAM as one of the largest global Alternative Asset Managers ($400B in fee-paying AUM), with an outsized exposure to some of the fastest growing parts of the market, including Infrastructure, Clean Energy, and Credit — collectively 63% of 2022E management fees,” Blostein wrote in a note to clients.

The company’s global footprint and scale should drive further benefits as limited partners continue to consolidate relationships with fewer managers, he added.

“As a result, we expect BAM to drive a robust 20%+ earnings growth CAGR through 2024,” Blostein said. He sees that growth supported by its fundraising in real estate, transition, and infrastructure at an accelerated pace, healthy deployment and fundraising in credit, horizontal product expansion across its main asset classes, and margin expansion.

His 12-month price target of $40 implies 23X Q5-Q8 P/E and a dividend yield of 3.2%.

On Monday trading, its first session of trading after the asset management arm was spun off from Brookfield (BN) as Brookfield Asset Management (BAM), BN dropped 22% and BAM rose 1.3%.

SA contributor Eric Sprague takes a look into the Brookfield distribution and what it means for investors.

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