Canadian Utilities A (TSE:CU)
TSX:CU
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Canadian Utilities A
(TSX:CU)
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Rating:58Neutral
Price Target:
C$49.00
â–²(1.41% Upside)
Action:DowngradedDate:03/01/26
The score is held back primarily by weakened recent financial performance (lower revenue/earnings, higher leverage, and volatile free cash flow) and a very expensive P/E valuation. These are partly offset by strong technical momentum and a generally constructive earnings call focused on capital plan-driven regulated growth and improved operating cash flow, albeit with renewables and execution/funding risks.
Positive Factors
Regulated capital-driven growth
A large, regulated capital program that lifts rate base at a 6.9% CAGR provides durable earnings and cash-flow growth via cost-of-service returns. Over 2–6 months this supports predictable revenue expansion and regulatory recovery of invested capital, underpinning long-term utility economics.
Negative Factors
High and rising leverage
A materially higher debt-to-equity ratio increases financial rigidity and interest burden for a capital-intensive utility. Over the medium term this constrains financial flexibility for further projects, raises refinancing risk if rates rise, and could pressure credit metrics and funding costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated capital-driven growth
A large, regulated capital program that lifts rate base at a 6.9% CAGR provides durable earnings and cash-flow growth via cost-of-service returns. Over 2–6 months this supports predictable revenue expansion and regulatory recovery of invested capital, underpinning long-term utility economics.
Read all positive factors
Canadian Utilities A (CU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$13.15B
Dividend Yield4.33%
Average Volume (3M)422.49K
Price to Earnings (P/E)97.6
Beta (1Y)0.26
Revenue Growth-0.94%
EPS Growth25.64%
CountryCA
Employees9,084
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)0.72
Shares Outstanding205,542,080
10 Day Avg. Volume547,242
30 Day Avg. Volume422,489
Financial Highlights & Ratios
PEG Ratio-1.09
Price to Book (P/B)1.82
Price to Sales (P/S)3.15
P/FCF Ratio112.76
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$47.33Price Target Upside-2.05% Downside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)2.53
Revenue Forecast (FY)C$4.20B
Canadian Utilities A Business Overview & Revenue Model
Company Description
Canadian Utilities Limited and its subsidiaries engage in the electricity, natural gas, and retail energy businesses worldwide. It operates through Utilities, Energy Infrastructure, and Corporate & Other segments. The Utilities segment provides re...
How the Company Makes Money
Canadian Utilities A generates revenue through multiple key streams. The primary source of income comes from the regulated utility operations segment, which includes the distribution and transmission of electricity and natural gas. These utility s...
Canadian Utilities A Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a largely positive picture: management delivered adjusted earnings growth and materially improved cash flow while announcing an ambitious $12 billion 5-year capital plan and demonstrating financing capability for the Yellowhead pipeline. Strong operational results, Australian outperformance (AA6), large new gas connections and storage expansion are notable wins. Key challenges remain in the renewables portfolio (significant curtailment and related impairments), a paused hydrogen hub due to policy gaps, timing and cost uncertainty on large projects, and potential future need for equity or asset recycling to fund the outer years of the plan. Overall, the positive operational and financial momentum and executable funding for major near-term projects outweigh the highlighted risks.Positive Updates
Adjusted Earnings Growth
Full-year 2025 adjusted earnings of $658 million ($2.42/share), up from $647 million in 2024 — an increase of $11 million or ~1.7% year-over-year, achieved despite $57 million of identified headwinds.
Negative Updates
Renewables Curtailment and Impairments
Significant curtailment on wind assets (up to ~40% on the largest 40-mile project versus near 0% a year prior) and related earnings pressure; renewables portfolio faced a $12 million earnings deficit tied to changing congestion policy and uncertainty in financial transmission rates.
Read all updates
Q4-2025 Updates
Positive
Negative
Adjusted Earnings Growth
Full-year 2025 adjusted earnings of $658 million ($2.42/share), up from $647 million in 2024 — an increase of $11 million or ~1.7% year-over-year, achieved despite $57 million of identified headwinds.
Read all positive updates
Company Guidance
The call provided detailed operational and financial guidance with many concrete metrics: Canadian Utilities delivered 2025 adjusted earnings of $658 million ($2.42/share) versus $647 million in 2024, overcoming $57 million of headwinds (including a $26 million ROE/efficiency gap and a $12 million renewables shortfall), supported by $36 million of Alberta utility rate base growth, $21 million from Australia (ATCO Australia adjusted earnings $69 million, up ~$21 million or ~45%), and $11 million (30% YoY) from Storage & Industrial Water; ATCO Energy Systems earned $642 million (up $10 million), cash flow from operations rose by $144 million, and the company added ~19,600 new gas connections in 2025. Management announced a $12 billion five‑year capital plan with a 5‑year regulated CAGR of 6.9% (up from a prior 3‑year forecast of 5.4%), Yellowhead pipeline filings for a ~$2.9 billion (+/‑20%) facility (fully contracted and equity‑funded via hybrids, preferreds and cash, with up to 30% indigenous partner interest and expected facility approval by Q3 to enable late‑Q3 construction), CETO ($255 million, 85 km to be energized by June), preliminary opportunities including a $500 million Northwest transmission estimate and a ~$1 billion McNeill converter scope (mostly outside the 5‑year plan), AA6 Australia ROE of 8.23% with ~80,000 expected new customers over the period and $500 million of Australian gas investment, expansion of storage from 117 PJ to 130 PJ by end‑2026, acquisition of an 18.6 MW peaker (Northstone), Atlas CCS commercial ops targeted late 2028, 0 recordable incidents in nonregulated businesses in 2025, and an expectation of further adjusted earnings growth in 2026.Canadian Utilities A Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
47
Neutral
Cash Flow
52
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.69B | 3.74B | 3.80B | 4.05B | 3.52B |
| Gross Profit | 914.00M | 1.44B | 1.45B | 1.72B | 1.36B |
| EBITDA | 1.86B | 1.76B | 2.03B | 1.80B | 1.53B |
| Net Income | 119.00M | 480.00M | 707.00M | 632.00M | 393.00M |
Balance Sheet | |||||
| Total Assets | 24.54B | 23.79B | 23.16B | 21.97B | 21.07B |
| Cash, Cash Equivalents and Short-Term Investments | 921.00M | 332.00M | 356.00M | 698.00M | 746.00M |
| Total Debt | 12.44B | 11.11B | 10.59B | 9.59B | 9.57B |
| Total Liabilities | 17.94B | 16.67B | 16.00B | 14.91B | 14.25B |
| Stockholders Equity | 6.38B | 6.91B | 6.94B | 6.88B | 6.63B |
Cash Flow | |||||
| Free Cash Flow | 103.00M | 322.00M | -12.00M | 771.00M | 497.00M |
| Operating Cash Flow | 1.54B | 1.92B | 1.33B | 2.14B | 1.72B |
| Investing Cash Flow | -1.64B | -1.41B | -2.25B | -1.26B | -1.26B |
| Financing Cash Flow | 846.00M | -790.00M | 434.00M | -932.00M | -478.00M |
Canadian Utilities A Technical Analysis
Positive
48.32
Price Trends
46.19
Positive
43.90
Positive
40.65
Positive
Market Momentum
0.51
Positive
59.72
Neutral
60.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CU, the sentiment is Positive. The current price of 48.32 is above the 20-day moving average (MA) of 48.18, above the 50-day MA of 46.19, and above the 200-day MA of 40.65, indicating a bullish trend. The MACD of 0.51 indicates Positive momentum. The RSI at 59.72 is Neutral, neither overbought nor oversold. The STOCH value of 60.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CU.
Canadian Utilities A 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% | |
60 Neutral | C$10.28B | 55.06 | 3.30% | 4.44% | -2.99% | -32.11% | |
58 Neutral | C$13.15B | 97.60 | 8.84% | 4.33% | -0.94% | 25.64% | |
54 Neutral | C$6.81B | -11.08 | 3.20% | 3.62% | 7.75% | 11.25% | |
51 Neutral | C$5.32B | -37.36 | -8.84% | 1.46% | -11.00% | -227.07% | |
51 Neutral | C$6.61B | 55.37 | 3.88% | 4.32% | -4.72% | 96.98% | |
45 Neutral | C$7.08B | -22.03 | 22.29% | 4.56% | 3.29% | 76.89% |
* Utilities Sector Average
TSE:CU
Canadian Utilities A
48.50
13.38
38.11%
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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.