• If you are wondering whether Brookfield Infrastructure Partners is still good value at around US$38.94, the key question is how its current price lines up with what the underlying business might be worth.
• The unit price has been relatively firm recently, with a 6.3% move over the last 30 days and a 13.5% return year to date, while the 1 year return sits at 35.5% and the 5 year return at 39.8%.
• These moves sit against an ongoing stream of news about global infrastructure demand, financing conditions and investor interest in assets that can offer contracted or regulated cash flows. For Brookfield Infrastructure Partners, that broader backdrop helps frame why the market is paying close attention to the reliability and growth profile of its assets.
• On Simply Wall St's 6 point valuation framework, Brookfield Infrastructure Partners currently scores 2 out of 6, which suggests only some checks point to undervaluation. Next, we will look at how different valuation methods treat the stock, and then finish with a more holistic way to think about value altogether.

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 might be worth today by projecting its future cash flows and discounting them back to a present value.

For Brookfield Infrastructure Partners, the model used here is a 2 Stage Free Cash Flow to Equity approach, based on cash flows in US$. The last twelve months free cash flow figure is a loss of $1.63b, so the model leans heavily on expectations for future cash generation rather than recent history.

Analyst and extrapolated projections show free cash flow reaching $5.57b by 2030, with annual forecasts stepping up through the late 2020s. Simply Wall St provides explicit estimates out to 2030, then extends them using modest growth assumptions through 2035.

On this basis, the DCF model suggests an intrinsic value of about $191.44 per unit, compared with the current price of roughly $38.94. That implies the units are assessed as 79.7% undervalued by this particular model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Brookfield Infrastructure Partners is undervalued by 79.7%. Track this in your watchlist or portfolio, or discover 47 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 investors are paying for each dollar of earnings. It captures both what the company is earning today and what the market is willing to pay, given its outlook and risk profile.

In general, higher growth expectations and lower perceived risk can justify a higher P/E ratio, while slower growth or higher risk tend to support a lower P/E as a fair starting point. Brookfield Infrastructure Partners currently trades on a P/E of 40.00x. That sits above the Integrated Utilities industry average of 19.14x and above the peer group average of 23.99x. Taken on their own, these comparisons might suggest a richer valuation.

Simply Wall St uses a “Fair Ratio” to go a step further. This proprietary measure estimates what a reasonable P/E could be for Brookfield Infrastructure Partners, given factors like its earnings growth profile, industry, profit margins, market cap and specific risks. Because it is tailored to the company, it can be more informative than a simple industry or peer comparison. For Brookfield Infrastructure Partners, the Fair Ratio is 36.37x, which is slightly below the current P/E of 40.00x and points to the units being priced above that fair range on this metric.

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 think about value. On Simply Wall St that starts with Narratives, where you pick a story for Brookfield Infrastructure Partners, link that story to explicit forecasts for revenue, earnings and margins, and arrive at your own Fair Value. The platform then compares this to the current unit price, updates automatically as new news or earnings arrive, and lets you see, for example, how one investor might anchor on a Fair Value of about US$53.61 while another sits closer to US$37.00. This allows you to decide which view better fits how you see the business before making any buy or sell decisions.

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

Each of these lays out a clear path for what would need to happen in the business for the current unit price to look attractive or stretched, so you can decide which story feels closer to your own view.

Fair value in this bullish narrative: US$53.61 per unit

Implied discount to this fair value at the last close of US$38.94: about 27%

Long term revenue change assumption in the model: 25.47% decline

• Assumes Brookfield Infrastructure Partners converts secular themes like AI related power demand, data infrastructure build out and large scale urban and energy projects into higher margins and stronger earnings than consensus currently embeds.
• Relies on capital recycling, buybacks and preferred redemptions to support per unit metrics, with analysts in this camp using a higher future P/E multiple and stronger profitability to arrive at a fair value of around US$53.61.
• Flags key risks such as higher interest costs, tighter regulation, fossil fuel exposure and deal execution, which could all make it harder for earnings and margins to reach the levels this bullish case is banking on.

Fair value in this bearish narrative: US$37.00 per unit

Implied premium to this fair value at the last close of US$38.94: about 5%

Long term revenue change assumption in the model: 25.19% decline

• Focuses on the risks of relying heavily on acquisitions and capital recycling, with concerns around potential dilution, integration challenges and the chance that some assets may not earn back their purchase prices over time.
• Highlights exposure to legacy fossil fuel infrastructure, higher refinancing costs, regulatory pressure and possible disruption from newer models like decentralized energy, all of which could limit margin expansion and cash flow growth.
• Arrives at a fair value of about US$37.00 using more cautious assumptions on future P/E and profitability, while still acknowledging that buybacks, inflation linked contracts and diversification can help support cash flows.

If these two narratives help you frame the debate but you want to see the full assumptions, you can step through the complete bull and bear cases for yourself using the links above and sense check which set of numbers feels more realistic.

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.