Capital Power (CPX) AI Stock Analysis

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Capital Power

(TSX:CPX)

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Neutral 64 (OpenAI - 5.2)

Rating:64Neutral

Price Target:

C$67.00

▲(8.89% Upside)

Action:ReiteratedDate:12/11/25

Capital Power's overall stock score reflects a mix of positive earnings call insights and financial performance challenges. Strong EBITDA growth and strategic achievements are tempered by operational and cash flow issues, as well as high leverage. Technical indicators suggest a cautious outlook, while valuation metrics provide mixed signals.

Positive Factors

Contract Extensions

The extension of long-term contracts provides stable revenue streams and enhances financial predictability, supporting sustained growth.

Battery Storage Projects

The addition of battery storage projects enhances Capital Power's renewable portfolio, aligning with industry trends towards sustainable energy solutions.

EBITDA Growth

Strong EBITDA growth indicates robust operational performance and effective cost management, contributing to long-term financial health.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially limiting the company's ability to invest in new projects or weather economic downturns.

Cash Flow Challenges

Declining free cash flow can hinder the company's ability to fund operations and investments, impacting long-term growth potential.

Increased Maintenance Costs

Higher maintenance costs can strain financial resources, potentially affecting profitability and operational efficiency over the long term.

Capital Power (CPX) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$9.80B

Dividend Yield4.44%

Average Volume (3M)771.52K

Price to Earnings (P/E)16.5

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 Outstanding156,403,950

10 Day Avg. Volume843,986

30 Day Avg. Volume771,520

Financial Highlights & Ratios

PEG Ratio-0.79

Price to Book (P/B)1.79

Price to Sales (P/S)2.78

P/FCF Ratio1.64K

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$76.33

Price Target Upside24.05% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

EPS Forecast (FY)2.83

Revenue Forecast (FY)C$3.56B

Capital Power Business Overview & Revenue Model

Company DescriptionCapital 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 MoneyCapital 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 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.

Q4-2025 Updates

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.

Record Annual Generation

Generated a record 45 TWh in 2025, with 52% of total generation coming from the U.S. portfolio, demonstrating successful geographic diversification and higher dispatch from U.S. assets.

Strong Financial Performance — Adjusted EBITDA

Full-year 2025 adjusted EBITDA of $1.58 billion, up $237 million or 18% year-over-year, driven primarily by higher contributions from U.S. flexible generation and structural improvements (acquisitions and lower emission costs).

Strong Financial Performance — AFFO

AFFO of $1.07 billion for 2025, up $242 million or 29% year-over-year, reflecting higher EBITDA and lower current income tax expense (partially offset by higher finance expense).

Commercial Wins with Significant Economic Upside (MCV and Arlington Valley)

MCV recontract extends to 2040 and is expected to generate an incremental ~ $100 million of adjusted EBITDA annually (an ~85% increase over prior contract pricing for the facility). Arlington Valley recontract extended summer tolling agreement through 2038, includes a 35 MW up-rate and reset pricing ~140% above the existing contract.

Asset Optimization and Upgrades

Optimized or upgraded 385 MW across the fleet (including 170 MW from two battery energy storage facilities in Ontario, 110 MW of capacity upgrades at York, Goreway and Arlington Valley, and advanced 105 MW expansion at East Windsor), and advanced/completed ~300 MW of new capacity.

Diversified Contracted Profile and Embedded Upside

Portfolio comprises 12 GW total capacity: 4.8 GW long-term contracted (2032–2047), 2.4 GW medium-term (2026–2031) and 4.8 GW merchant (primarily Alberta and PJM). Management highlights embedded upside on existing assets of up to $1 billion of adjusted EBITDA opportunity, driven by recontracting and merchant price capture.

Reaffirmed Guidance and Balance Sheet Focus

Reaffirmed 2026 guidance; emphasis on maintaining investment-grade balance sheet, disciplined capital allocation (supporting the dividend while reinvesting most cash flow), and a targeted return range of 13%–15%.

Leadership and Strategic Partnerships

Announced incoming CFO Kevin MacIntosh (30+ years in energy finance) to replace interim CFO Scott Manson; progressing an MOU with Apollo to expand acquisition capability while maintaining investment-grade metrics.

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.

Higher Finance Expense from Increased Borrowings

AFFO gains were partially offset by higher finance expense associated with increased borrowings to fund growth, increasing financing cost pressure even as total cash generation improved.

Reduced Contribution from Canadian Renewables

Lower contributions from the Canadian Renewables segment following a sell-down transaction executed in December 2024, which weighed on segment EBITDA versus the prior year.

Planned Increase in Sustaining Capital Expenditures

Sustaining CapEx is expected to be higher in 2026 than historical levels; management asserts this is planned and deliberate to maintain reliability and extend asset life, but it reduces near-term free cash for other uses.

Regulatory and Market Uncertainty in PJM

Potential PJM reforms (RBA and policy discussions prompted by federal/state initiatives) represent execution risk — biggest generator concern is bifurcation of pricing between existing and new generation and uncertainty around the ultimate market framework; this creates timing/contracting uncertainty for certain long‑dated opportunities.

Timing and Permitting Uncertainty on Certain Growth Opportunities

Unlocking additional Genesee volumes (engineering solution) is expected toward the back half of 2026 and requires permitting/testing; similarly, potential expansions (Rolling Hills repowering/expansion) remain attractive but lack finalized CapEx/timing, creating near-term uncertainty on realized incremental supply.

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

Capital Power's financial performance shows mixed results. Positive revenue growth and a healthy net profit margin are offset by negative EBIT margins and declining free cash flow. High leverage adds financial risk, though the equity position remains stable.

Income Statement

Positive

Capital Power's income statement shows mixed results. The TTM data indicates a negative gross profit margin, which is concerning, but the net profit margin remains healthy at 15.34%. Revenue growth is positive at 5.5%, suggesting some recovery. However, the EBIT margin is negative, indicating operational challenges. The EBITDA margin is robust at 43.59%, reflecting strong cash earnings despite operational issues.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio of 1.45, indicating significant leverage, which poses a risk. The return on equity is moderate at 9.81%, showing some profitability. The equity ratio is not explicitly calculated, but the company's equity position appears stable relative to its assets.

Cash Flow

Neutral

Cash flow analysis shows a decline in free cash flow growth, which is negative, indicating cash flow challenges. The operating cash flow to net income ratio is 0.60, suggesting moderate cash generation relative to net income. The free cash flow to net income ratio is negative, highlighting potential cash flow issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.01B	2.95B	4.00B	4.50B	2.83B	1.90B
Gross Profit	-137.00M	15.00M	630.00M	1.53B	871.00M	473.00M
EBITDA	1.27B	1.57B	1.62B	809.00M	828.00M	887.00M
Net Income	413.00M	699.00M	744.00M	138.00M	98.00M	136.00M
Balance Sheet
Total Assets	15.35B	12.93B	11.16B	10.13B	9.07B	8.91B
Cash, Cash Equivalents and Short-Term Investments	204.00M	865.00M	1.42B	307.00M	387.00M	367.00M
Total Debt	6.83B	5.11B	4.86B	3.88B	3.50B	3.70B
Total Liabilities	10.34B	8.36B	7.97B	7.67B	6.21B	5.98B
Stockholders Equity	5.02B	4.58B	3.19B	2.45B	2.84B	2.90B
Cash Flow
Free Cash Flow	178.00M	5.00M	45.00M	217.00M	214.00M	278.00M
Operating Cash Flow	1.15B	1.07B	768.00M	899.00M	836.00M	584.00M
Investing Cash Flow	-3.55B	-1.92B	-807.00M	-910.00M	-565.00M	-349.00M
Financing Cash Flow	2.46B	271.00M	1.16B	-66.00M	-244.00M	-119.00M

Capital Power Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price61.53

Price Trends

50DMA

60.23

Positive

100DMA

63.02

Negative

200DMA

60.63

Positive

Market Momentum

MACD

0.83

Positive

RSI

49.68

Neutral

STOCH

46.59

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CPX, the sentiment is Neutral. The current price of 61.53 is above the 20-day moving average (MA) of 61.42, above the 50-day MA of 60.23, and above the 200-day MA of 60.63, indicating a bullish trend. The MACD of 0.83 indicates Positive momentum. The RSI at 49.68 is Neutral, neither overbought nor oversold. The STOCH value of 46.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CPX.

Capital Power Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

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	64 Neutral	C$9.80B	16.48	9.40%	4.44%	-2.99%	-32.11%
CU	58 Neutral	C$13.04B	97.60	8.84%	4.33%	-0.94%	25.64%
NPI	58 Neutral	C$5.57B	-28.57	-7.06%	6.80%	-4.86%	-86.64%
TA	55 Neutral	C$5.36B	-37.36	-9.02%	1.46%	-11.00%	-227.07%
AQN	54 Neutral	$7.30B	26.51	2.04%	4.32%	-4.72%	96.98%
BLX	47 Neutral	C$2.77B	422.17	-1.47%	2.62%	-11.91%	-132.41%

* Utilities Sector Average

Performance Comparison

TSE:CPX

Capital Power

61.53

14.38

30.49%

TSE:TA

TransAlta

18.07

4.20

30.25%

TSE:BLX

Boralex Inc Cl A

27.09

-1.16

-4.12%

TSE:CU

Canadian Utilities A

47.95

14.34

42.68%

TSE:AQN

Algonquin Power & Utilities

9.52

2.84

42.45%

TSE:NPI

Northland Power

21.29

3.03

16.57%

Capital Power Corporate Events

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 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.

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 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.

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 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.

Delistings and Listing ChangesDividends

Capital Power Announces Conversion Privilege and Dividend Rate for Series 1 Shares

Neutral

Dec 1, 2025

Capital Power Corporation announced the conversion privilege and dividend rate for its Cumulative Rate Reset Preference Shares, Series 1, allowing shareholders to convert these into Series 2 shares. The conversion period runs from December 1 to December 16, 2025, with specific conditions for automatic conversion if certain thresholds are not met. The Toronto Stock Exchange has conditionally approved the listing of Series 2 Shares, pending fulfillment of listing requirements.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$66.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Business Operations and StrategyPrivate Placements and Financing

Capital Power Launches C$600 Million Note Offering and Plans Debt Redemption

Positive

Nov 6, 2025

Capital Power Corporation announced a C$600 million public offering of unsecured medium-term notes in Canada, with an interest rate of 4.231% maturing in 2033. The proceeds will be used to refinance existing debt, including the redemption of C$300 million of its 2026 notes, and for general corporate purposes. This strategic financial move is expected to strengthen the company’s debt profile and support its ongoing projects, potentially enhancing its market position and operational flexibility.

The most recent analyst rating on (TSE:CPX) stock is a Buy with a C$79.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresPrivate Placements and Financing

Capital Power Reports Strong Q3 2025 Results and Announces CFO Retirement

Positive

Oct 29, 2025

Capital Power reported strong financial results for the third quarter of 2025, with significant achievements including a new long-term contract for the Midland Cogeneration Venture and the commissioning of 170 MW of battery storage in Ontario. The company is enhancing its liquidity with a new $600 million credit facility and is reaffirming its 2025 guidance despite planned outages in Alberta. CFO Sandra Haskins announced her retirement after 23 years, with Scott Manson stepping in as interim CFO. These developments underscore Capital Power’s strategic focus on growth, stability, and value creation for stakeholders.

The most recent analyst rating on (TSE:CPX) stock is a Buy 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.

Dividends

Capital Power Declares Dividends for Common and Preference Shares

Positive

Oct 28, 2025

Capital Power Corporation announced dividends for its common and preference shares, with the common share dividend set at $0.6910 per share for the quarter ending December 31, 2025. The preference shares also have declared dividends with varying amounts per series, all payable by December 31, 2025. These dividends are 100% eligible under the Income Tax Act, potentially offering Canadian residents enhanced tax credits. This announcement reflects Capital Power’s commitment to providing shareholder value and maintaining its financial health, impacting stakeholders positively by offering tax-efficient returns.

The most recent analyst rating on (TSE:CPX) stock is a Buy 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.

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.Date of analysis: Dec 11, 2025