Brookfield Infrastructure Partners (NYSE:BIP) has drawn fresh attention after recent trading, with the units closing at $38.69. For investors, that price sits against a backdrop of varied short and longer term returns.

Recent trading has been a little softer in the very near term, but a 10.1% 1 month share price return and 12.8% year to date share price return sit alongside a 21.8% 1 year total shareholder return. This suggests momentum has been building over time.

If Brookfield Infrastructure Partners has you thinking about long term, asset heavy businesses, you might also want to check out our 24 power grid technology and infrastructure stocks as another way to uncover infrastructure themed ideas.

With the units at $38.69, an indicated discount to one set of price targets and a low value score raise a clear question for investors: is Brookfield Infrastructure Partners still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 7.7% Undervalued

Against the last close at $38.69, the most followed narrative points to a fair value of about $41.91 using a 9.5% discount rate, which frames Brookfield Infrastructure Partners as modestly undervalued on its long lived asset base.

Robust institutional investor demand for infrastructure as an inflation protected and stable asset class is deepening exit optionality and supporting premium valuations of BIP's mature assets, allowing for profitable asset divestitures and further capital to be recycled into value accretive projects, supporting growth in EBITDA and net margins.

Want to see what sits behind that valuation gap? The narrative leans heavily on future earnings expansion, margin improvement and a lower earnings multiple than today to get there.

Result: Fair Value of $41.91 (UNDERVALUED)

However, this hinges on deals going to plan, with acquisition missteps or higher borrowing costs both capable of quickly challenging that 7.7% undervalued story.

Another Angle on Value

The narrative pegs fair value at $41.91, but our earnings based multiple tells a different story. Brookfield Infrastructure Partners trades on a P/E of 39.7x, compared with a fair ratio of 37.4x, the peer average of 23.5x, and 19.7x for the wider Integrated Utilities group. That is a rich premium, so is the market already giving full credit for future earnings growth?

Next Steps

Does this mixed picture of premiums, risks and potential rewards leave you on the fence? Act while the data is fresh and weigh it up with our 3 key rewards and 2 important warning signs.

Looking for more investment ideas?

If Brookfield Infrastructure Partners is already on your radar, do not stop there. Widening your watchlist now can help you spot the next opportunity early.

• Target income first by scanning companies in our 13 dividend fortresses that focus on meaningful yields backed by underlying business strength.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.