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Capital Power (TSE:CPX)
TSX:CPX
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Capital Power (CPX) AI Stock Analysis

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TSE:CPX

Capital Power

(TSX:CPX)

Rating:69Neutral
Price Target:
C$63.00
▲(8.47%Upside)
Capital Power's strong financial guidance and strategic acquisitions are key strengths, supported by solid valuation metrics. However, revenue growth challenges and high leverage pose risks. The technical indicators suggest moderate bullish momentum, while corporate events highlight strategic improvements.
Positive Factors
Acquisitions
The acquisition enhances CPX's scale and relevance with expected increases in EBITDA, free cash flow, enterprise value, and net capacity.
Investor Sentiment
The acquisition further levers CPX to natural gas power where investor sentiment has shifted to the positive.
Market Position
CPX shares are rated Outperform due to the attractive relative valuation, exposure to the long-term trend of rising power demand, and upside optionality to the AI data center opportunity.
Negative Factors
Data Center Demand
The weaker data center story makes it difficult to see Capital Power rallying further.
Economic Headwinds
The target price reduction reflects lower multiples across the SOTP valuation due to potential broader economic headwinds.
Power Market Challenges
The AESO Large Load Phase 1 allocation framework limits hyperscaler upside for Capital Power.

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

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 makes money primarily through the generation and sale of electricity. The company operates a portfolio of power generation facilities across North America, which produce electricity that is sold on wholesale markets or through power purchase agreements (PPAs) with utilities and other large energy consumers. Revenue is generated from the sale of electricity at market prices or through fixed-rate contracts. Additionally, Capital Power may earn income from capacity payments, ancillary services, and environmental credits related to its renewable energy operations. Strategic partnerships and joint ventures can also contribute to revenue, allowing the company to expand its operational capabilities and market reach.

Capital Power Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: -6.74%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by Capital Power, marked by significant growth through strategic acquisitions, operational excellence, and financial resilience. While there are challenges in renewable resources and data center project decisions, the positive developments and robust financial guidance provide a net positive outlook.
Q2-2025 Updates
Positive Updates
Largest Acquisition to Date
Capital Power announced and closed its largest acquisition, adding 2.2 gigawatts of capacity, contributing to its transformation over the past three years.
Operational Excellence and Growth
The company reached commercial operation on the Goreway uprate project, delivered 9 terawatt hours of power, and completed 62% of scheduled outage days for the year.
Financial Performance
Adjusted EBITDA was $322 million, flat year-over-year, with strong contributions from the diversified U.S. flexible generation portfolio.
Revised 2025 Guidance
Due to a recent acquisition, the revised adjusted EBITDA range is now projected to be between $1.5 billion and $1.65 billion, with AFFO expected to be between $950 million and $1.1 billion.
Successful U.S. Debt Issuance
Capital Power executed a $1.2 billion private offering, which was multiple times oversubscribed, highlighting strong market confidence.
Resilient Asset Base
The company maintained its track record, with Alberta's Genesee units being the most efficient in Canada, paying no carbon tax and increasing clean spark spreads despite a 70% decline in Alberta Pool pricing.
Negative Updates
Lower Renewable Resource
The renewables portfolio faced a decline in adjusted EBITDA due to a lower wind resource in Canada and the U.S.
Challenges with Data Center Expansion
The company chose not to pursue a smaller data center project at Genesee due to insufficient capacity allocation in Phase 1.
Increased Financing Costs
Higher financing costs were noted due to recent debt issuances, impacting the financials despite overall strong performance.
Company Guidance
During the Capital Power Second Quarter 2025 Analyst Conference Call, the company provided revised guidance for the full year. Adjusted EBITDA is now projected to range between $1.5 billion and $1.65 billion, reflecting nearly seven months of contributions from newly acquired PJM assets. The adjusted funds from operations (AFFO) range is anticipated to be between $950 million and $1.1 billion, marking a significant increase due to favorable tax impacts and asset acquisitions. Sustaining capital expenditures are forecasted at $215 million to $245 million. These projections underscore Capital Power's confidence in their strategy and ability to deliver strong financial performance amidst macroeconomic uncertainties.

Capital Power Financial Statement Overview

Summary
Capital Power exhibits commendable profitability and effective equity use but faces challenges with revenue growth and cash flow management. High leverage could pose risks in adverse conditions.
Income Statement
74
Positive
Capital Power shows strong profitability with a stable gross profit margin and an improved net profit margin over the TTM. However, revenue has decreased compared to the previous year, indicating challenges in maintaining growth.
Balance Sheet
68
Positive
The company maintains a healthy equity ratio, but the debt-to-equity ratio is relatively high, suggesting significant leverage. Return on equity is strong, indicating effective use of shareholder funds.
Cash Flow
59
Neutral
Operating cash flow remains robust compared to net income, yet the company faces negative free cash flow growth due to high capital expenditure, indicating potential cash flow management issues.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.77B4.15B2.80B1.86B1.88B
Gross Profit1.98B1.98B1.22B1.19B1.30B
EBITDA1.63B1.68B809.00M828.00M882.00M
Net Income699.00M744.00M138.00M98.00M136.00M
Balance Sheet
Total Assets12.93B11.16B10.13B9.07B8.91B
Cash, Cash Equivalents and Short-Term Investments851.00M1.42B290.00M370.00M343.00M
Total Debt5.11B4.86B3.87B3.50B3.69B
Total Liabilities8.36B7.97B7.67B6.21B5.98B
Stockholders Equity4.58B3.19B2.45B2.84B2.90B
Cash Flow
Free Cash Flow74.00M45.00M253.00M245.00M305.00M
Operating Cash Flow1.14B768.00M935.00M867.00M611.00M
Investing Cash Flow-1.92B-807.00M-910.00M-565.00M-349.00M
Financing Cash Flow202.00M1.16B-102.00M-275.00M-146.00M

Capital Power Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price58.08
Price Trends
50DMA
56.65
Positive
100DMA
52.62
Positive
200DMA
54.01
Positive
Market Momentum
MACD
1.26
Positive
RSI
48.16
Neutral
STOCH
27.08
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 58.08 is below the 20-day moving average (MA) of 58.85, above the 50-day MA of 56.65, and above the 200-day MA of 54.01, indicating a neutral trend. The MACD of 1.26 indicates Positive momentum. The RSI at 48.16 is Neutral, neither overbought nor oversold. The STOCH value of 27.08 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 (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
C$9.01B18.1710.00%4.49%-16.83%-37.24%
67
Neutral
$17.54B18.007.11%3.56%4.38%9.89%
$3.57B21.342.97%1.45%
72
Outperform
C$8.01B26.687.52%4.72%-0.51%-17.17%
72
Outperform
$2.79B69.964.20%2.62%0.97%
56
Neutral
C$3.24B294.580.67%2.11%-16.63%-87.78%
$4.27B23.056.08%5.19%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CPX
Capital Power
58.08
16.76
40.56%
TAC
TransAlta
12.05
4.05
50.63%
TSE:BLX
Boralex Inc Cl A
31.36
-2.05
-6.14%
TSE:CU
Canadian Utilities A
38.58
7.04
22.32%
TSE:INE
Innergex Renewable Energy
13.74
4.63
50.82%
NPIFF
Northland Power
16.37
0.73
4.67%

Capital Power Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Capital Power Strengthens Leadership Team with Key Appointments
Positive
Jul 30, 2025

Capital Power has appointed Ferio Pugliese as Senior Vice President, Chief Corporate Officer, and Roger Huang as Vice President, Corporate Development and U.S. Renewables. These appointments are expected to enhance the company’s leadership capabilities and support its growth ambitions, particularly in scaling operations and expanding its U.S. renewables platform.

The most recent analyst rating on (TSE:CPX) stock is a Buy with a C$64.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

DividendsBusiness Operations and Strategy
Capital Power Increases Dividend by 6% and Declares Preference Share Dividends
Positive
Jul 30, 2025

Capital Power announced a 6% increase in its quarterly dividend for common shares, raising it to $0.6910 per share, payable on October 31, 2025. This move reflects the company’s commitment to providing value to shareholders and aligns with its growth strategy. Additionally, dividends were declared for its Cumulative Rate Reset Preference Shares, offering tax benefits under Canadian law. This announcement underscores Capital Power’s strong financial position and its dedication to shareholder returns, while also acknowledging its operations within Indigenous territories.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$68.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Private Placements and FinancingM&A TransactionsDividendsFinancial Disclosures
Capital Power Expands U.S. Portfolio with Major Acquisition in Q2 2025
Positive
Jul 30, 2025

Capital Power Corporation announced its second quarter 2025 results, highlighting the completion of its largest acquisition to date of the Hummel and Rolling Hills facilities in the PJM market, adding approximately 2.2 GW of capacity to its U.S. flexible generation portfolio. This acquisition is expected to enhance the company’s market positioning and support long-term shareholder value creation. The company also reported an increase in its annual dividend for the 12th consecutive year and significant financial activities, including a private offering of senior notes and equity capital raising. The revised annual guidance reflects increased targets for AFFO and adjusted EBITDA, indicating a strong financial outlook.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$68.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Capital Power Completes Major Acquisition of U.S. Natural Gas Facilities
Positive
Jun 10, 2025

Capital Power Corporation has completed the acquisition of the Hummel and Rolling Hills natural gas facilities in Pennsylvania and Ohio, respectively, for approximately US$2.2 billion. This strategic acquisition, financed through a combination of equity and notes offerings, is expected to enhance Capital Power’s operational capacity and strengthen its position in the North American energy market, potentially increasing adjusted funds from operations per share.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$68.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Capital Power Secures $1.2 Billion for Strategic U.S. Acquisitions
Positive
May 28, 2025

Capital Power Corporation has successfully closed a private offering of US$1.2 billion in senior notes to fund its acquisition of Hummel Station, LLC and Rolling Hills Generating, L.L.C., two significant natural gas facilities in the United States. This strategic move is expected to enhance Capital Power’s operational capabilities and market position, with potential implications for future growth and debt management.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$68.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Private Placements and FinancingM&A Transactions
Capital Power Prices $1.2 Billion Senior Notes for Strategic Acquisition
Positive
May 13, 2025

Capital Power Corporation announced the pricing of a private offering of US$1.2 billion in senior notes to fund its acquisition of Hummel Station, LLC and Rolling Hills Generating, L.L.C., both natural gas facilities in the United States. The proceeds from this offering will support the company’s strategic expansion in the energy sector, enhancing its operational capacity and market presence.

The most recent analyst rating on (TSE:CPX) stock is a Hold with a C$68.00 price target. To see the full list of analyst forecasts on Capital Power stock, see the TSE:CPX Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
Capital Power Announces 2025 Shareholder Meeting Results
Neutral
May 1, 2025

Capital Power Corporation held its annual meeting of shareholders on April 29, 2025, where all 10 director nominees were elected, KPMG LLP was appointed as auditors, and the approach to executive compensation was approved. Additionally, the continuation of the Amended and Restated Shareholder Rights Plan Agreement was passed. These decisions reflect Capital Power’s commitment to maintaining strong governance and operational strategies, reinforcing its position in the power production industry.

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: Jul 31, 2025