Capital Power (TSE:CPX)
TSX:CPX
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Capital Power
(TSX:CPX)
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Rating:60Neutral
Price Target:
C$66.00
â–²(0.69% Upside)
Action:ReiteratedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Capital Power (CPX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$10.25B
Dividend Yield4.44%
Average Volume (3M)771.52K
Price to Earnings (P/E)55.1
Beta (1Y)0.91
Revenue Growth-2.99%
EPS Growth-32.11%
CountryCA
Employees741
SectorUtilities
Sector Strength65
IndustryIndependent Power Producers
Share Statistics
EPS (TTM)-0.12
Shares Outstanding156,404,000
10 Day Avg. Volume843,986
30 Day Avg. Volume771,520
Financial Highlights & Ratios
PEG Ratio-0.66
Price to Book (P/B)1.81
Price to Sales (P/S)2.65
P/FCF Ratio187.43
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$76.60Price Target Upside16.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)2.61
Revenue Forecast (FY)C$3.56B
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 ga...
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 capt...
Capital Power Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call was overall positive: management reported record generation and strong cash-flow metrics (adjusted EBITDA up 18% and AFFO up 29% YoY), executed strategic acquisitions (2.2 GW in PJM), delivered major recontracts with material pricing uplifts (MCV +85% EBITDA impact, Arlington Valley +140% pricing), and highlighted significant embedded upside from recontracting and merchant price capture. Offsetting items include lower GAAP net income driven by non-cash adjustments, higher finance expense from growth-related borrowings, a reduction in Canadian renewables contribution, planned higher sustaining CapEx in 2026, and policy/market uncertainties in PJM and timing/permitting for some growth projects. Given the scale and magnitude of the operational and cash-flow wins relative to the limited near-term accounting and policy headwinds, the tone and substance of the call skew strongly positive.Positive Updates
Material Growth in Capacity Through Acquisition
Acquired 2.2 GW of generation capacity via the PJM acquisition, diversifying the portfolio and increasing U.S. flexible generation exposure; acquisition performance (Hummel and Rolling Hills) delivered adjusted EBITDA ahead of expectations in the first two quarters under Capital Power ownership.
Negative Updates
Lower Net Income Due to Non‑Cash Items
Reported net income for 2025 was lower than 2024 primarily because of non-cash items: unfavorable unrealized fair value adjustments on commodity derivatives and emission credits, higher depreciation and amortization from acquired/placed-in-service assets, and absence of prior-year divestiture gains — pressures that did not affect cash generation but reduced accounting net income.
Read all updates
Q4-2025 Updates
Positive
Negative
Material Growth in Capacity Through Acquisition
Acquired 2.2 GW of generation capacity via the PJM acquisition, diversifying the portfolio and increasing U.S. flexible generation exposure; acquisition performance (Hummel and Rolling Hills) delivered adjusted EBITDA ahead of expectations in the first two quarters under Capital Power ownership.
Read all positive updates
Company Guidance
Capital Power reaffirmed its 2026 guidance, saying the outlook is supported by full‑year contributions from 2025 acquisitions, structural carry‑forwards and conservative market assumptions with disciplined hedging and capital allocation; management warned that sustaining capital will be higher than historical levels but said the company will still generate strong AFFO and support the dividend within its targeted payout ratio while maintaining an investment‑grade balance sheet. The call anchored guidance to 2025 results: adjusted EBITDA of $1.58 billion (+$237M, +18%), AFFO $1.07 billion (+$242M, +29%), record 45 TWh generation (52% U.S.), a 12 GW portfolio (4.8 GW long‑term contracted 2032–2047, 2.4 GW medium‑term expiring 2026–2031, 4.8 GW merchant), 2.2 GW acquired (PJM), 2 GW of contracts optimized, and 385 MW of upgrades/expansions (including 170 MW battery, 110 MW capacity upgrades and 105 MW East Windsor expansion). Management reiterated a 13–15% return target, noted commercial wins that materially improve cash flow (MCV recontract to 2040 adding ~ $100M of adjusted EBITDA annually, an ~85% price increase; Arlington Valley recontract to 2038 with a 35 MW up‑rate and ~140% price reset), and highlighted embedded upside of up to $1 billion of incremental adjusted EBITDA from recontracting and merchant price capture while maintaining a contracted floor (~60%, presently ~75%).Capital Power Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
58
Neutral
Cash Flow
46
Neutral
| 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
Positive
65.55
Price Trends
61.39
Positive
61.59
Positive
61.38
Positive
Market Momentum
0.95
Negative
60.84
Neutral
86.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CPX, the sentiment is Positive. The current price of 65.55 is above the 20-day moving average (MA) of 62.90, above the 50-day MA of 61.39, and above the 200-day MA of 61.38, indicating a bullish trend. The MACD of 0.95 indicates Negative momentum. The RSI at 60.84 is Neutral, neither overbought nor oversold. The STOCH value of 86.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CPX.
Capital Power Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
61 Neutral | C$6.08B | -28.57 | -7.06% | 6.80% | -4.86% | -86.64% | |
60 Neutral | C$10.25B | 55.06 | 3.30% | 4.44% | -2.99% | -32.11% | |
58 Neutral | C$13.20B | 97.60 | 8.84% | 4.33% | -0.94% | 25.64% | |
51 Neutral | C$5.34B | -37.36 | -8.84% | 1.46% | -11.00% | -227.07% | |
51 Neutral | C$6.59B | 25.55 | 3.88% | 4.32% | -4.72% | 96.98% | |
46 Neutral | C$3.77B | 422.17 | 0.45% | 2.62% | -11.91% | -132.41% |
* Utilities Sector Average
TSE:CPX
Capital Power
65.55
18.24
38.57%
TSE:TA
TransAlta
17.98
4.63
34.67%
TSE:BLX
Boralex Inc Cl A
36.70
8.28
29.13%
TSE:CU
Canadian Utilities A
48.50
13.38
38.11%
TSE:AQN
Algonquin Power & Utilities
8.57
1.41
19.76%
TSE:NPI
Northland Power
23.26
4.60
24.63%
Capital Power Corporate Events
Business Operations and StrategyDividends
Capital Power Maintains Payouts With New Common and Preferred Share Dividends
Positive
Mar 4, 2026
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 res...
Business Operations and StrategyExecutive/Board Changes
Capital Power Names Veteran Energy Executive Kevin MacIntosh as CFO
Positive
Feb 19, 2026
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 bring...
Business Operations and StrategyFinancial Disclosures
Capital Power Extends Arlington Valley Contract to 2038 and Boosts Summer Capacity
Positive
Jan 7, 2026
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 pr...
Dividends
Capital Power Confirms Series 1 Shares Dividend Reset; No Series 2 Conversions
Positive
Dec 17, 2025
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...
Business Operations and StrategyPrivate Placements and Financing
Capital Power Accelerates Growth with Strategic Partnerships
Positive
Dec 10, 2025
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 fo...
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.