Brookfield Asset Management stock forecast as it bids to buy AusNet for $7.7 billion

on Nov 1, 2021
  • AusNet Services on Sunday announced it agreed to be acquired by Brookfield Asset Management.
  • The Canadian alternative asset management company is buying the Australian gas company for $7.7 billion.
  • Brookfield offered A$2.65 per share, slightly above rival suitor APA Group’s September offer of A$2.60.

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Brookfield Asset Management Inc.’s (NYSE:BAM) bid to buy AusNet Services Ltd (ASX:AST) for $7.7 billion has been accepted according to the Australian energy transmission company. The Canadian alternative asset management company has agreed to pay A$2.65 per share, slightly higher than the rival suitor APA Group’s (ASX:APA) September offer of A$2.60. 

Singapore Power International, AusNet’s largest shareholder, said it will vote for the deal. Last week, news emerged that Brookfield had also agreed to buy Scientific Games Corp.’s (NASDAQ:SGMS) lotto business in a $6 billion deal. 

BAM reportedly was among several private equity firms that made offers to buy a stake in Saudi Arabian Oil Co’s (SAU:2222) natural gas pipeline in the first-round bids.

Is Brookfield stock a buy?

From an investment perspective, Brookfield Asset Management shares trade at a reasonable forward P/E ratio of 19.08, making the stock potentially attractive to value investors.

However, with analysts expecting its earnings to fall by 115% this year before bouncing back 35.66% next year, growth investors could opt for alternatives in the market. 

The stock has gained 54% this year and more than 102% over the last 12 months, leaving little room for more upward movement.

Source – TradingView

Technically, Brookfield Asset Management stock seems to be trading within an ascending channel formation in the intraday chart. However, it has recently pulled back to find the trendline support.

Nonetheless, with shares still trading closer to overbought conditions than they are to the oversold levels, the downward movement looks poised to continue.

Therefore, investors could target extended short-term pullbacks at about $58.41, or lower at $56.26, while $62.01 and $64.20 are crucial support zones.

Time to take some profits?

In summary, with BAM shares trading closer to overbought levels, now could be a good time to take some profits. In addition, this year’s expected earnings decline could limit the upside potential.


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