Analyst Benjamin Pham from BMO Capital maintained a Buy rating on Capital Power and increased the price target to C$79.00 from C$70.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Benjamin Pham has given his Buy rating due to a combination of factors that highlight Capital Power’s strategic positioning and potential for growth. Despite weaker power prices in Alberta, the company’s significant exposure to U.S. gas power assets is proving advantageous, with these assets outperforming expectations in terms of utilization, pricing, and contract renewals. This positive performance in the U.S. market is expected to more than compensate for the challenges faced in Alberta, as evidenced by a 40% year-over-year increase in U.S. Flexible Generation earnings.
Furthermore, the company’s shares are considered undervalued, trading at approximately 10 times EBITDA, which is below the broader industry average. The outlook for Alberta’s power market is also improving, with forward prices and potential developments like the Genesee DC optionality being viewed positively by the market. Additionally, Capital Power’s ongoing projects and future opportunities, such as the 250MW DC opportunity at MCV and further U.S. gas power value realization, support a favorable long-term growth trajectory. These factors collectively underpin Pham’s decision to maintain an Outperform rating and a target price of $79.
According to TipRanks, Pham is a 5-star analyst with an average return of 9.3% and a 67.67% success rate. Pham covers the Utilities sector, focusing on stocks such as Brookfield Renewable Partners, Boralex Inc Cl A, and Capital Power.
In another report released today, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a C$78.00 price target.