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Algonquin Power & Utilities (TSE:AQN)
TSX:AQN
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Algonquin Power & Utilities
(TSX:AQN)
Rating:52Neutral
Price Target:
C$8.00
▲(3.09% Upside)
Positive Factors
Earnings Potential
Management outlines an ambitious EPS growth path, which suggests strong future earnings potential.
Leadership and Strategy
The new CEO is viewed positively and the transition to a pure-play utility with an improved balance sheet and transparency is seen as beneficial.
Strategic Moves
Significant accretive acquisition drives target price bump, reflecting investor confidence in strategic moves.
Negative Factors
Guidance Disappointment
AQN did not unveil its formal 2025 guidance with Q4/24 results as previously messaged, which disappointed the market.
Rating Downgrade
The rating on AQN is lowered to Market Perform from Outperform despite strong initial results.
Stock Volatility
AQN stock initially sold off aggressively at the open, down as much as ~10.0%, due to the EPS miss, lack of 2025 guidance, and expected delay in the Empire Electric Missouri rate decision.
Algonquin Power & Utilities (AQN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$6.02B
Dividend Yield4.63%
Average Volume (3M)1.95M
Price to Earnings (P/E)―
Beta (1Y)1.20
Revenue Growth-6.96%
EPS Growth-1235.30%
CountryCA
Employees3,786
SectorUtilities
Sector Strength60
IndustryRenewable Utilities
Share Statistics
EPS (TTM)0.06
Shares Outstanding768,025,000
10 Day Avg. Volume1,836,249
30 Day Avg. Volume1,945,908
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.56
Enterprise Value/Revenue6.49
Enterprise Value/Gross Profit8.76
Enterprise Value/Ebitda16.40
Forecast
1Y Price Target
$8.73Price Target Upside12.48% Upside
Rating ConsensusHold
Number of Analyst Covering9
Algonquin Power & Utilities Business Overview & Revenue Model
Company DescriptionAlgonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets. The company operates through two segments, Regulated Services Group and Renewable Energy Group. The Regulated Services Group segment operates a portfolio of rate-regulated utilities located in the United States, Canada, Chile, and Bermuda. Its utilities provide distribution services to approximately 1,093,000 customer connections in the electric, natural gas, and water and wastewater sectors The Renewable Energy Group segment generates and sells electrical energy, capacity, ancillary products, and renewable attributes produced by its portfolio of renewable and clean power generation facilities primarily in the United States and Canada. It owns and operates hydroelectric, wind, solar, and thermal facilities; and owns and operates a portfolio of clean energy and water infrastructure assets. The company was incorporated in 1988 and is headquartered in Oakville, Canada.
How the Company Makes MoneyAlgonquin Power & Utilities generates revenue primarily through the sale of electricity and utility services. The company has a diversified revenue model with key revenue streams including long-term power purchase agreements (PPAs) for its renewable energy projects, which provide stable and predictable cash flows. Additionally, regulated utility operations contribute significantly to earnings, as these services typically involve fixed rates set by regulatory bodies, ensuring a steady income stream. AQN also benefits from strategic partnerships and investments in renewable projects, which enhance its market presence and operational capacity. Factors contributing to its earnings include favorable regulatory environments, increasing demand for renewable energy, and a growing focus on sustainability among consumers and businesses.
Algonquin Power & Utilities Earnings Call Summary
Earnings Call Date:Aug 08, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with both positive and negative aspects. The company reported regulatory achievements and strategic strengthening of the management team, alongside a solid financial outlook. However, these were offset by a decline in adjusted net earnings and EPS compared to the previous year.Q2-2025 Updates
Positive Updates
Regulatory Progress
Notable rate case filings during the quarter with a total combined rate adjustment request of $73.6 million. Settlement agreement approved by the Arizona Corporation Commission resulting in a $4.2 million revenue adjustment.
Executive Management Strengthening
Appointments of Noel Black as Chief Regulatory and External Affairs Officer and Amy Walt as Chief Customer Officer, signaling a commitment to operational excellence and stakeholder engagement.
Financial Outlook and Strategy
Company announced a 3-year financial outlook and Back to Basics customer-centric plan, projecting improvements in earned ROE, operating expenses as a percent of revenues, and capital investment deployment, with no common equity financings needed through 2027.
Negative Updates
Decrease in Adjusted Net Earnings
Second quarter adjusted net earnings from continuing operations were $36.2 million, down approximately 13% from $41.5 million in 2024.
EPS Decline
Q2 adjusted net earnings per share were $0.04, down from $0.06 in Q2 2024, influenced by the elimination of Atlantica dividends, share dilution, higher depreciation taxes, and lower income from wind production.
Company Guidance
During the second quarter 2025 earnings call for Algonquin Power & Utilities Corp., the company provided guidance indicating solid financial results and a strong outlook for the year. They reported adjusted net earnings from continuing operations of $36.2 million, a decrease of approximately 13% from the previous year's $41.5 million. The adjusted net earnings per share were $0.04, down from $0.06 in the previous year. Notable financial projections include an estimated adjusted net EPS outlook for 2025 through 2027, expected improvements to earned ROE, and operating expenses as a percent of revenues. The company anticipates maintaining its BBB investment-grade credit rating and does not foresee the need for common equity financings through 2027. Moreover, a total combined rate adjustment request of $73.6 million was filed during the quarter. The Arizona Corporation Commission approved a $4.2 million revenue adjustment, with new rates effective July 1. The company continues to focus on strategic investments to improve customer experience, drive operational efficiencies, and achieve regulatory outcomes, all while aiming to become a premium pure-play regulated utility.Algonquin Power & Utilities Financial Statement Overview
Summary
Algonquin Power & Utilities is facing significant financial headwinds, with ongoing net losses impacting profitability and returns on equity. While operational efficiency is evident through reasonable EBIT and EBITDA margins, the high debt levels and negative cash flows could pose risks. The company must focus on improving revenue growth and managing debt to enhance financial stability and shareholder value.Income Statement
The income statement shows a mixed performance. The gross profit margin for TTM (Trailing-Twelve-Months) is strong at 75.43%, but the company is grappling with significant net losses, as evidenced by a negative net profit margin of -48.77% for TTM. Revenue has declined from previous years, indicating challenges in maintaining growth. The EBIT and EBITDA margins are reasonable, at 19.51% and 39.23% respectively for TTM, suggesting operational efficiency amidst financial pressures.55
Neutral
Balance Sheet
The balance sheet reflects a moderate level of financial stability. The debt-to-equity ratio is 1.35 for TTM, indicating moderate leverage, which is common in the utilities sector. The return on equity (ROE) is concerning at -25.45% for TTM, reflecting the impact of net losses on shareholders' returns. However, the equity ratio is healthy at 34.36% for TTM, indicating a decent cushion of equity to cover assets and liabilities.60
Neutral
Cash Flow
The cash flow statement reveals challenges in cash management. The operating cash flow to net income ratio is negative due to net losses, and free cash flow remains negative for TTM at -457.60 million. While operating cash flow is positive at 424.87 million, the negative free cash flow highlights substantial capital expenditures, which require careful management to avoid liquidity issues.45
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.38B | 2.32B | 2.70B | 2.77B | 2.27B | 1.68B |
| Gross Profit | 1.76B | 1.73B | 1.06B | 1.90B | 1.56B | 1.28B |
| EBITDA | 941.33M | 1.04B | 732.98M | 1.08B | 772.86M | 655.26M |
| Net Income | -1.37B | -1.38B | 28.67M | -308.15M | 264.86M | 782.46M |
Balance Sheet | ||||||
| Total Assets | 13.69B | 16.96B | 18.37B | 17.63B | 16.79B | 13.22B |
| Cash, Cash Equivalents and Short-Term Investments | 54.30M | 34.84M | 56.14M | 57.62M | 125.16M | 101.61M |
| Total Debt | 6.33B | 6.70B | 8.52B | 7.51B | 6.21B | 4.54B |
| Total Liabilities | 8.57B | 10.78B | 11.43B | 10.47B | 9.08B | 7.23B |
| Stockholders Equity | 4.68B | 4.71B | 5.04B | 5.22B | 5.86B | 5.20B |
Cash Flow | ||||||
| Free Cash Flow | -425.37M | -390.70M | -398.14M | -469.93M | -1.19B | -280.81M |
| Operating Cash Flow | 438.57M | 481.72M | 628.03M | 619.10M | 157.47M | 505.22M |
| Investing Cash Flow | 2.14B | 132.74M | -1.10B | -1.79B | -1.80B | -1.23B |
| Financing Cash Flow | -2.64B | -556.41M | 442.81M | 1.11B | 1.67B | 766.86M |
Algonquin Power & Utilities Technical Analysis
Neutral
7.76
Price Trends
8.00
Negative
7.80
Positive
7.17
Positive
Market Momentum
-0.05
Positive
40.77
Neutral
20.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AQN, the sentiment is Neutral. The current price of 7.76 is below the 20-day moving average (MA) of 7.95, below the 50-day MA of 8.00, and above the 200-day MA of 7.17, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 40.77 is Neutral, neither overbought nor oversold. The STOCH value of 20.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:AQN.
Algonquin Power & Utilities Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | ― | ― | 0.97% | ― | |||
66 Neutral | $17.24B | 17.99 | 5.60% | 3.67% | 6.63% | 11.55% | |
61 Neutral | C$266.58M | 59.81 | -4.34% | 6.60% | 4.98% | -244.98% | |
54 Neutral | C$2.89B | 271.12 | -0.61% | 2.37% | -13.45% | -112.19% | |
52 Neutral | $6.02B | ― | 1.50% | 4.63% | -6.96% | -1235.30% | |
| ― | $16.47B | ― | -5.97% | 5.89% | ― | ― | |
| ― | $4.24B | 22.35 | -1.19% | 5.29% | ― | ― |
* Utilities Sector Average
Performance Comparison
TSE:AQN
Algonquin Power & Utilities
7.76
0.89
12.94%
BEP
Brookfield Renewable Partners
25.02
1.87
8.08%
TSE:BLX
Boralex Inc Cl A
27.85
-2.66
-8.72%
TSE:INE
Innergex Renewable Energy
13.74
4.73
52.50%
TSE:PIF
Polaris Infrastructure
12.69
1.36
12.00%
NPIFF
Northland Power
16.22
1.86
12.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.