BMO Capital raised its price objective for Brookfield Business Partners L.P. (NYSE:BBU) to $43.00 from $42.00 on Friday and maintained an Outperform rating on the units.
The bank highlighted several factors behind its decision. BMO pointed to strong performance across many of Brookfield Business Partners' larger portfolio companies and said market conditions remain supportive of monetizations. It also flagged expectations for elevated new investment activity in 2026 as an additional source of potential growth for the partnership.
Despite a meaningful increase in the unit price over the last year - and a particularly large uptick in the last six months, according to InvestingPro data - BMO said the risk/reward profile for the units continues to tilt positively. The firm also noted that Brookfield Business Partners units trade at a significant discount to liquidity net asset value, a valuation dynamic that supports its maintained Outperform recommendation.
In summary, BMO's view rests on three central observations: continued strong operating results at key portfolio holdings, a favorable market backdrop for turning assets into cash through monetizations, and anticipated higher levels of new investment activity in 2026. Those elements, together with the current discount to liquidity NAV, underpin the firm’s decision to raise the target while keeping an optimistic rating.
Context and market signal
The move to increase the price target by $1.00 reflects BMO's assessment that recent operational and market developments justify a modest upward revision while leaving the overall recommendation unchanged. The bank's reference to InvestingPro data emphasizes the scale of recent unit price appreciation over both the one-year and six-month horizons.
What is clear from BMO's note
- Many of the partnership's largest portfolio companies are performing well, according to the firm.
- Market conditions are presently conducive to monetizations, supporting liquidity generation.
- New investment activity at the partnership is expected to be elevated in 2026, which could create incremental growth opportunities.
BMO's combination of valuation observation - the units' discount to liquidity NAV - and the operational and market factors described above form the basis for its maintained Outperform stance and the slight upward revision to the price target.