• If you are wondering whether Brookfield Infrastructure Partners units are offering good value right now, this article walks through what the current price could mean for long term investors.
• The stock last closed at US$38.75, with total returns of 1.9% over 7 days, 10.2% over 30 days, 13.0% year to date and 24.3% over 1 year, compared to 29.5% over 3 years and 37.1% over 5 years.
• Recent attention on Brookfield Infrastructure Partners has focused on how its listed utilities exposure fits into portfolios that want both income and infrastructure style assets, as investors reassess how these businesses sit alongside other yield focused options. At the same time, ongoing discussion about the role of essential services assets in diversified portfolios has kept the partnership on many watchlists and helped frame how the current unit price is being assessed.
• Our Simply Wall St valuation model gives Brookfield Infrastructure Partners a valuation score of 2 out of 6. This suggests there are some areas where the units screen as undervalued and others where they do not. Next, we will walk through the different valuation approaches behind that score and then finish with a broader way to think about value that goes beyond any single model.

Brookfield Infrastructure Partners scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Brookfield Infrastructure Partners Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and then discounting those back to today using a required rate of return.

For Brookfield Infrastructure Partners, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $. The latest twelve month free cash flow figure is a loss of $1.63b. From there, analysts and Simply Wall St projections point to free cash flow reaching $5.57b in 2030, with a detailed path of annual estimates and extrapolations between 2026 and 2035.

When all those projected cash flows are discounted back to today, the DCF model arrives at an estimated intrinsic value of US$178.73 per unit. Compared to the recent unit price of US$38.75, this implies the units are trading at a 78.3% discount to that DCF estimate, which screens as significantly undervalued on this model alone.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Brookfield Infrastructure Partners is undervalued by 78.3%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

Approach 2: Brookfield Infrastructure Partners Price vs Earnings

For a profitable business, the P/E ratio is a straightforward way to see how much you are paying for each dollar of earnings. This makes it a useful cross check against a cash flow model such as the DCF.

What counts as a “normal” P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually points to a lower multiple being more appropriate.

Brookfield Infrastructure Partners currently trades on a P/E of 39.81x. That sits above the Integrated Utilities industry average P/E of 19.75x and also above the peer group average of 23.49x. Simply Wall St’s Fair Ratio framework estimates a P/E of 37.43x for Brookfield Infrastructure Partners, based on factors such as its earnings profile, industry, profit margins, market value and specific risk characteristics.

This Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for company specific factors rather than assuming all utilities or all peers deserve the same multiple. With the current P/E of 39.81x sitting somewhat above the Fair Ratio of 37.43x, the units screen as slightly expensive on this measure.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Brookfield Infrastructure Partners Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives to link your view of Brookfield Infrastructure Partners to a concrete forecast and Fair Value. You can do this by telling a short story about the business, attaching your own revenue, earnings and margin assumptions, and then comparing that Fair Value to the current price. The platform updates your Narrative automatically when new news or earnings arrive and lets you see, for example, how a more cautious view anchored around the US$31 bearish Fair Value and a more optimistic view anchored around the roughly US$52 bullish Fair Value can both be reasonable depending on what you believe about Brookfield Infrastructure Partners future cash flows.

For Brookfield Infrastructure Partners however we will make it really easy for you with previews of two leading Brookfield Infrastructure Partners Narratives:

Fair Value: US$52.15 per unit

Implied discount vs last close: around 26% below this Fair Value, based on the current price of US$38.75

Revenue change assumption: 15.61% decline

• Views buybacks, preferred unit redemptions and capital recycling as supportive for unit value over time, alongside ongoing updates to revenue, margin and discount rate assumptions.
• Frames AI, data infrastructure and energy demand themes as supportive for recurring cash flows, while accepting that recent assumptions now point to slightly softer revenue and a modestly higher required return.
• Accepts that the model Fair Value is close to the upper end of published analyst targets and encourages you to test whether the updated growth, margin and future P/E inputs feel reasonable to you.

Fair Value: US$37.00 per unit

Implied premium vs last close: around 5% above this Fair Value, based on the current price of US$38.75

Revenue change assumption: 25.19% decline

• Places more weight on risks around acquisition heavy growth, fossil fuel exposure and funding costs, with updated assumptions that include lower margins than before and a relatively higher future P/E multiple.
• Treats recent analyst target tweaks in the low single digits as a sign that the debate is mostly about execution, capital allocation and funding conditions rather than about the core asset base.
• Suggests the current unit price sits close to this more cautious Fair Value. Your own view on interest rates, asset sales and long term cash flow resilience will likely drive whether you think there is much upside from here.

If you want to see how these narratives connect to detailed forecasts and Fair Value ranges, you can step through the full bull and bear stories for Brookfield Infrastructure Partners using Curious how numbers become stories that shape markets? Explore Community Narratives.

Do you think there's more to the story for Brookfield Infrastructure Partners? Head over to our Community to see what others are saying!

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.