Brookfield (TSX:BN) Valuation in Focus After Landmark Nuclear Partnership with US Government

Brookfield (TSX:BN) shares drew renewed attention after the company, Cameco, and Westinghouse teamed up with the US Department of Commerce on a major initiative to expand nuclear reactor deployment. This partnership highlights significant backing for nuclear energy projects and signals potential new avenues for growth.

See our latest analysis for Brookfield.

The partnership news arrived as Brookfield’s shares continued a solid upward run, with a 16.9% share price return year to date and a standout total shareholder return of 31.4% over the past year. Momentum has clearly been building, and the multi-year total returns show strong performance both in the short and long view.

If Brookfield’s role in the nuclear energy boom has you thinking bigger, you might want to take the next step and discover fast growing stocks with high insider ownership

With shares outperforming the market and a major nuclear partnership in play, the big question is whether today's price reflects all the upside, or if this could be a rare entry point before future growth is fully priced in.

Price-to-Sales of 1.3x: Is it justified?

Brookfield trades at a price-to-sales (P/S) ratio of 1.3x, which is notably lower than both its industry peers and the broader Canadian capital markets sector. At a last close price of CA$64.59, this valuation suggests the market is not pricing in much future revenue growth.

The price-to-sales ratio measures how much investors are willing to pay per dollar of revenue. For a diversified financials company like Brookfield, the P/S is especially relevant when earnings are inconsistent or volatile. It offers a clearer lens on how the market values its current top line.

Compared to the Canadian Capital Markets industry average of 4.2x and an estimated fair P/S of 2x, Brookfield appears inexpensive on this metric. The company is also trading below the peer average of 103.7x, which points to the market's conservative stance. The current P/S multiple may underestimate Brookfield’s business breadth, especially if market sentiment shifts or long-term revenue expansion returns. The fair ratio benchmark suggests the market could eventually re-rate the stock higher if fundamentals improve.

Explore the SWS fair ratio for Brookfield

Result: Price-to-Sales of 1.3x (UNDERVALUED)

However, revenue growth has been negative and recent price targets forecast only modest upside. Market sentiment could shift if fundamentals do not improve soon.

Find out about the key risks to this Brookfield narrative.

Build Your Own Brookfield Narrative

If our view does not match your own, or you want to dive deeper into the numbers, you can quickly build your personal outlook on Brookfield in just a few minutes. Do it your way

A great starting point for your Brookfield research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Don't let great opportunities pass you by. Seize the chance to spot standout stocks with powerful growth, resilient yields, or cutting-edge technology advancements using our latest screeners.

• Boost your portfolio with monthly income by targeting these 22 dividend stocks with yields > 3% offering yields above 3% in today’s market.
• Ride the next tech wave by tapping into innovation leaders among these 26 AI penny stocks driving advancements in artificial intelligence and automation.
• Capitalize on overlooked value by searching for hidden gems within these 840 undervalued stocks based on cash flows based on their robust cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com