Brookfield Corp's Next Earnings Report on May 14 Could Send the Stock Soaring. Here's Why.
Key Points
Brookfield Corporation reports its first-quarter financial results this week.
It should show a growth reacceleration, as evidenced by recent reports from its listed affiliates.
The company should grow briskly over the next five years.
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Brookfield Corporation (NYSE: BN) is on deck to report its first-quarter financial results this week. The global investment firm will report its results before the market opens on Thursday, May 14.
The report could send the financial stock soaring. Here's what drives that view.
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The reacceleration is taking hold
Shares of Brookfield Corporation haven't done much this year. The stock was recently up modestly (less than 3%), underperforming the S&P 500's more than 8% rise. That's due to a combination of concerns about its exposure to the private credit market and its rather lackluster four-quarter results, which it reported in March. Brookfield posted flat earnings during that quarter, slowing its full-year growth rate to 11%.
However, the company will likely report much stronger first-quarter results this week. We've already gotten a glimpse of what's ahead from the reports of some of its listed affiliated companies.
For example, Brookfield Asset Management reported its first-quarter results last week. The leading alternative investment manager posted an 11% increase in its fee-related and distributable earnings, driven by the strength of its real assets investment platforms and complementary strategies. CEO Connor Teskey commented in the first-quarter earnings press release that "We expect 2026 to be a very strong year, with growth exceeding our long-term targets."
Likewise, two of Brookfield's operating companies posted strong first-quarter results. Brookfield Infrastructure delivered a 10% increase in its funds from operations (FFO) per share, fueled by the strength of its data and midstream segments. Meanwhile, Brookfield Renewable reported a 15% increase in its FFO per share, powered by acquisitions, strong organic growth, and development projects.
The beginning of a very strong period
While Brookfield's growth rate slowed last quarter, it's coming off a strong period. The investment firm has grown its distributable earnings at a 22% compound annual rate over the last five years. It has benefited from the strength of its asset management platform, the continued growth of its operating businesses, and the addition of its wealth management platform.
Brookfield believes that the next five years will be even better. It's in the midst of a transformative growth phase, driven by its strategy to capitalize on several megatrends. The company sees a once-in-a-lifetime opportunity to invest in AI infrastructure. Brookfield Asset Management launched its first AI infrastructure fund (Brookfield Corporation is a cornerstone investor) while it's also investing in data centers, semiconductor manufacturing capacity, and power solutions through its operating businesses. Brookfield also sees significant growth potential for its wealth solutions platform as more individual investors seek retirement solutions. Additionally, the company believes we're in the early stages of a global real estate recovery.
The company believes these catalysts position it to deliver 25% compound annual growth in its distributable earnings per share over the next five years. That positions Brookfield to generate strong total returns, especially given that its stock currently trades well below the company's estimated intrinsic value of $68 per share. With the stock recently trading at $47 per share, it's nearly 45% below its estimated value. Brookfield expects to increase its value to $140 a share by 2030 as it executes its growth strategy.
Poised to soar
Brookfield Corporation has underperformed this year due to its slowing growth at the end of last year. However, its growth rate should have reaccelerated in the first quarter, and that accelerated growth trend should continue over the next five years. That makes the stock look like a buy ahead of its earnings report this week, as shares could soar once investors realize how much growth it has ahead.
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Matt DiLallo has positions in Brookfield Asset Management, Brookfield Corporation, Brookfield Infrastructure, Brookfield Infrastructure Partners, Brookfield Renewable, and Brookfield Renewable Partners and has the following options: short July 2026 $40 puts on Brookfield Corporation. The Motley Fool has positions in and recommends Brookfield Asset Management and Brookfield Corporation. The Motley Fool recommends Brookfield Infrastructure Partners, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
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