Capital Power (CPX) AI Stock Analysis

• Market Cap: C$9.57B
• Dividend Yield: 4.44%
• Average Volume (3M): 771.52K
• Price to Earnings (P/E): 55.1
• Beta (1Y): 0.88
• Revenue Growth: -2.99%
• EPS Growth: -32.11%
• Country: CA
• Employees: 741
• Sector: Utilities
• Sector Strength: 65
• Industry: Independent Power Producers
• EPS (TTM): -0.12
• Shares Outstanding: 156,404,000
• 10 Day Avg. Volume: 843,986
• 30 Day Avg. Volume: 771,520
• PEG Ratio: -0.66
• Price to Book (P/B): 1.81
• Price to Sales (P/S): 2.65
• P/FCF Ratio: 187.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$76.33
• Price Target Upside: 24.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.45
• Revenue Forecast (FY): C$3.56B

• Rating: 60 Neutral
• Price Target: C$66.00 ▲(7.84% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is held back primarily by weakening profitability and sharply thinner free cash flow alongside rising leverage trends. Offsetting this, technical momentum is moderately positive and the latest earnings call was constructive with reaffirmed guidance and strong adjusted cash-flow growth, while valuation remains a constraint due to a very high P/E despite a solid dividend yield.

Positive Factors

Geographic and asset diversification via PJM acquisition

The 2.2 GW PJM acquisition materially increases scale and U.S. flexible generation exposure into a deep, liquid market. That diversification reduces single-market concentration, broadens merchant optimization opportunities, and improves visibility into long‑term cash flows from higher‑value dispatch.

Strong cash-flow growth (Adjusted EBITDA & AFFO)

Robust adjusted EBITDA and AFFO growth alongside record generation indicate durable operating cash generation. Sustained cash-flow expansion underpins the dividend, funds reinvestment and acquisitions, and provides a base to absorb near‑term financing costs and higher sustaining capex without immediate structural stress.

Material recontracting uplifts enhance contracted cash flow

Major recontracts that reset pricing materially raise contracted cash flow and extend revenue visibility. Long‑dated contracts and uprates reduce merchant exposure, create durable earnings uplift, and improve the quality of future cash flows, enabling more predictable capital allocation and debt servicing.

Negative Factors

Severely compressed free cash flow

Free cash flow collapsed in 2025, leaving little internal cash after investments. Persistently low FCF hampers internal funding for growth and dividends, increases reliance on external financing, and reduces the company’s buffer for higher sustaining capex or adverse market/regulatory outcomes over the coming months.

Rising leverage and higher finance expense

Higher debt levels and rising finance costs shrink financial flexibility and elevate refinancing risk. Increased leverage makes the business more sensitive to interest-rate movements and constrains capacity for opportunistic M&A or dividend growth without further balance‑sheet repair.

Profitability volatility and weak 2025 operating margins

Despite revenue recovery, 2025 showed negative gross and EBIT margins and sharply lower ROE, signaling volatile profitability. If margins remain pressured by higher depreciation, hedging losses or lower renewable contributions, sustainable earnings power and return targets could be harder to achieve long term.

Capital Power Business Overview & Revenue Model

Company Description

Capital Power Corporation develops, acquires, owns, and operates renewable and thermal power generation facilities in Canada and the United States. It generates electricity from various energy sources, including wind, solar, waste heat, natural gas, and coal. The company owns an approximately 6,600 megawatts of power generation capacity at 26 facilities. It also manages its related electricity, natural gas, and emissions portfolios by undertaking trading and marketing activities. The company was founded in 1891 and is headquartered in Edmonton, Canada.

How the Company Makes Money

Capital Power generates revenue primarily through the sale of electricity produced by its power generation facilities. The company's revenue model is anchored in long-term power purchase agreements (PPAs) and spot market sales, allowing it to capture stable income from contracted customers while also capitalizing on market prices. Key revenue streams include electricity generation from natural gas, wind, and solar projects, with a focus on expanding its renewable energy portfolio. Additionally, Capital Power engages in ancillary services and energy trading, which further enhance its earnings. Strategic partnerships with other energy companies and participation in renewable energy initiatives also contribute to its revenue growth.

Capital Power Financial Statement Overview

Summary

Mixed fundamentals: 2025 revenue rebounded (+10.2% YoY) but profitability weakened materially (slightly negative gross profit and negative EBIT margin) versus stronger 2023–2024. Leverage is moderate but rising (debt-to-equity ~1.42), and free cash flow compressed sharply (~$47M, -74% YoY), reducing financial flexibility despite solid operating cash flow.

Income Statement

Revenue rebounded in 2025 (+10.2% YoY) after declines in 2023–2024, but profitability has become more volatile. 2025 shows slightly negative gross profit and negative EBIT margin, even though net income stayed positive (~4.8% net margin), pointing to pressure below the EBITDA line and/or non-operating support. Margins were much stronger in 2023–2024 (healthy gross profit and solid net margins), so the 2025 deterioration is a key watch item despite the top-line recovery.

Balance Sheet

The balance sheet is moderately levered for the industry, with debt-to-equity rising to ~1.42 in 2025 (up from ~1.12 in 2024) alongside a sizable increase in total debt. Equity has grown over time, but returns on equity fell sharply in 2025 (~3.3%) versus much stronger levels in 2023–2024, suggesting reduced efficiency in converting the capital base into earnings. Overall leverage looks manageable, but the upward debt trend and weaker recent returns reduce the cushion.

Cash Flow

Operating cash flow remains solid in absolute dollars (about $911M in 2025), but free cash flow weakened materially: 2025 free cash flow was only ~$47M and down ~74% YoY, leaving limited internally generated cash after investment needs. Free cash flow relative to net income is low in recent years (especially 2024–2025), indicating earnings quality is less cash-generative lately. The cash profile is stable at the operating level, but the thin and declining free cash flow is the main concern.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.32B	2.95B	4.00B	4.50B	2.83B
Gross Profit	-10.00M	15.00M	630.00M	1.53B	871.00M
EBITDA	380.00M	1.57B	1.62B	809.00M	828.00M
Net Income	160.00M	699.00M	744.00M	138.00M	98.00M
Balance Sheet
Total Assets	15.44B	12.93B	11.16B	10.13B	9.07B
Cash, Cash Equivalents and Short-Term Investments	119.00M	865.00M	1.42B	307.00M	387.00M
Total Debt	6.88B	5.11B	4.86B	3.88B	3.50B
Total Liabilities	10.59B	8.36B	7.97B	7.67B	6.21B
Stockholders Equity	4.86B	4.58B	3.19B	2.45B	2.84B
Cash Flow
Free Cash Flow	47.00M	5.00M	45.00M	217.00M	214.00M
Operating Cash Flow	911.00M	1.07B	768.00M	899.00M	836.00M
Investing Cash Flow	-3.76B	-1.92B	-807.00M	-910.00M	-565.00M
Financing Cash Flow	2.13B	271.00M	1.16B	-66.00M	-244.00M

Capital Power Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 61.20
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CPX, the sentiment is Negative. The current price of 61.2 is below the 20-day moving average (MA) of 62.55, above the 50-day MA of 60.95, and above the 200-day MA of 61.13, indicating a neutral trend. The MACD of 0.41 indicates Positive momentum. The RSI at 46.59 is Neutral, neither overbought nor oversold. The STOCH value of 56.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CPX.

Capital Power Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPX	60 Neutral	C$9.57B	55.06	9.40%	4.44%	-2.99%	-32.11%
CU	58 Neutral	C$12.86B	97.60	8.84%	4.33%	-0.94%	25.64%
NPI	58 Neutral	C$5.64B	-28.57	-7.06%	6.80%	-4.86%	-86.64%
TA	55 Neutral	C$4.81B	-37.36	-8.84%	1.46%	-11.00%	-227.07%
AQN	50 Neutral	C$6.59B	25.55	3.88%	4.32%	-4.72%	96.98%
BLX	47 Neutral	C$2.90B	422.17	0.45%	2.62%	-11.91%	-132.41%

Capital Power Corporate Events

Capital Power Maintains Payouts With New Common and Preferred Share Dividends

Capital Power declared a quarterly dividend of $0.6910 per common share for the period ending March 31, 2026, payable on April 30 to shareholders of record on March 31. The Board also announced cash dividends on three series of cumulative rate reset preferred shares, all designated as eligible dividends under Canadian tax law, reinforcing the company’s ongoing capital return strategy and offering tax-efficient income to Canadian investors.

The preferred share dividends cover Series 1, 3 and 5, with payment dates of March 31, 2026 and a record date of March 18, 2026. By maintaining regular dividends across its common and preferred shares, Capital Power underlines its financial stability and commitment to shareholder returns, which may support its standing in the utilities and power generation sector and appeal to income-focused investors.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$63.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Capital Power Names Veteran Energy Executive Kevin MacIntosh as CFO

Capital Power has appointed veteran energy finance executive Kevin MacIntosh as its new Chief Financial Officer, effective March 16, 2026, succeeding interim CFO Scott Manson, who will assist with the transition through April. MacIntosh, who brings more than three decades of experience at major energy players including Suncor Energy and Irving Oil, has led initiatives in intelligent ERP implementation, finance integration and energy trading, aligning with Capital Power’s growth strategy and focus on operational optimization.

The company expects his expertise in capital allocation, acquisition integration, cross-border reporting and process optimization to support its expansion across North American power markets. The appointment underscores Capital Power’s intention to leverage seasoned financial leadership to sustain performance and execute its ambitious growth agenda in a competitive and evolving energy sector.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$63.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Capital Power Extends Arlington Valley Contract to 2038 and Boosts Summer Capacity

Capital Power has extended its summer tolling agreement for the Arlington natural gas-fired facility in Arizona with an investment-grade utility by seven years to October 2038, securing 13 years of contracted revenue and reinforcing its role in providing grid reliability in the U.S. Southwest. As part of the deal, Arlington will undergo a 35 MW summer capacity uprate—10 MW in 2026 and 25 MW in 2027—boosting its ability to serve Arizona’s growing peak demand and supporting an estimated uplift of about US$70 million in annual adjusted EBITDA by 2032, while the six-month contract structure preserves winter merchant flexibility and access to additional energy and capacity value opportunities in CAISO and the broader Desert Southwest.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$65.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Capital Power Confirms Series 1 Shares Dividend Reset; No Series 2 Conversions

Capital Power announced that no Cumulative Rate Reset Preference Shares, Series 1, were tendered for conversion into Series 2 shares as of the December 16, 2025 deadline, meaning no Series 2 shares will be issued currently. The fixed dividend rate for Series 1 shares has been reset to 4.958% for the next five years, providing clarity to shareholders and reinforcing the company’s commitment to stable and predictable returns.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$65.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Capital Power Accelerates Growth with Strategic Partnerships

Capital Power announced a strategic partnership with Apollo Funds for a US$3 billion investment to acquire U.S. natural gas generation assets, enhancing its growth strategy and expanding earnings. Additionally, the company entered a binding MOU for a 250 MW Electricity Supply Agreement in Alberta, supporting the province’s AI infrastructure growth and underscoring its commitment to long-term reliable growth.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$67.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.