Capital Power (CPX) AI Stock Analysis

• Market Cap: C$9.20B
• Dividend Yield: 4.44%
• Average Volume (3M): 771.52K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 1.05
• Revenue Growth: -2.99%
• EPS Growth: -32.11%
• Country: CA
• Employees: 741
• Sector: Utilities
• Sector Strength: 65
• Industry: Independent Power Producers
• EPS (TTM): 0.94
• Shares Outstanding: 155,961,600
• 10 Day Avg. Volume: 843,986
• 30 Day Avg. Volume: 771,520
• PEG Ratio: -0.79
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 2.78
• P/FCF Ratio: 1.64K
• 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$77.44
• Price Target Upside: 29.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: C$67.00 ▲(12.38% Upside)

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 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

Capital Power shows a mixed financial performance. While operational efficiency is evident in EBIT margins, declining revenue and profit margins raise concerns. The high leverage and declining return on equity suggest financial risk, while cash flow challenges highlight potential liquidity issues. The company needs to address revenue growth and manage debt levels to improve its financial health.

Income Statement

The income statement shows a mixed performance. Gross profit margins are stable, but there is a declining trend in revenue and net profit margins over the TTM period. Revenue growth has been negative recently, indicating potential challenges in market conditions or operational efficiency. However, the company maintains a reasonable EBIT margin, suggesting some operational efficiency.

Balance Sheet

The balance sheet reflects a moderate financial position with a high debt-to-equity ratio, indicating significant leverage. Return on equity has decreased over time, which could be a concern for investors. However, the equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth and a negative free cash flow to net income ratio in the TTM period. Operating cash flow remains positive but has decreased, indicating potential liquidity issues if trends continue.

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 Price: 59.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 59.62 is below the 20-day moving average (MA) of 61.30, below the 50-day MA of 65.06, and above the 200-day MA of 57.68, indicating a neutral trend. The MACD of -1.21 indicates Positive momentum. The RSI at 39.81 is Neutral, neither overbought nor oversold. The STOCH value of 8.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CPX.

Capital Power Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CU	72 Outperform	C$11.41B	21.53	8.84%	4.33%	-0.94%	25.64%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPX	64 Neutral	C$9.20B	21.18	9.40%	4.44%	-2.99%	-32.11%
AQN	54 Neutral	$6.54B	-156.12	2.04%	4.32%	-4.72%	96.98%
NPI	53 Neutral	C$4.61B	-16.21	-7.06%	6.80%	-4.86%	-86.64%
TA	49 Neutral	$5.09B	-26.82	-8.42%	1.46%	-11.00%	-227.07%
BLX	47 Neutral	C$2.60B	-112.68	-1.47%	2.62%	-11.91%	-132.41%

Capital Power Corporate Events

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

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.

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

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.

Capital Power Reports Strong Q3 2025 Results and Announces CFO Retirement

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.

Capital Power Declares Dividends for Common and Preference Shares

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.

Capital Power Launches First Battery Energy Storage Projects in Ontario

Capital Power has successfully commissioned its first-ever Battery Energy Storage Systems (BESS) in Ontario, with the 120-MW York and 50-MW Goreway projects now operational. These projects, contracted until 2047, will significantly contribute to grid stability, support renewable resource integration, and meet growing electricity demand, adding roughly $35 million in annual EBITDA for over 20 years. This development positions Capital Power as a leader in North America’s energy expansion, providing up to 170 megawatts of storage capacity to ensure reliable and lower-emitting electricity for Ontarians.

Capital Power Secures Long-term Contract for Midland Cogeneration Venture

Capital Power has secured a new long-term contract with Consumers Energy for the Midland Cogeneration Venture, extending until 2040. This agreement is expected to generate an annual increase of approximately US$100 million in adjusted EBITDA for the facility, enhancing revenue stability and reinforcing the facility’s role in Michigan’s energy market. The contract underscores Capital Power’s commitment to maintaining grid reliability and supporting the transition to a sustainable energy future, while also highlighting the strategic importance of the Midland facility in the MISO market.