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Canadian Utilities A
(TSX:CU)
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Rating:59Neutral
Price Target:
C$58.00
▲(3.85% Upside)
Action:Reiterated
Date:08/02/26
The score is mainly constrained by weakened profitability and returns despite solid cash generation, alongside a very high P/E valuation. Offsetting factors include a technically constructive price trend and a positive earnings-call outlook with regulated growth initiatives and improved year-over-year earnings and operating cash flow.
Positive Factors
Regulated capital program / rate-base growth
A CAD 12B, five-year capital program focused on regulated utilities implies sustained additions to rate base that typically earn allowed returns under regulator frameworks. This drives multi-year predictable revenue and earnings visibility, supporting durable cash flows and long-term growth in regulated earnings.
Negative Factors
Weakened profitability and returns
Trailing margins and returns have deteriorated materially: a ~3% net margin and ROE near 1.6% compress retained earnings and signal weaker bottom-line conversion of operating performance. Persistently low profitability limits reinvestment capacity and shareholder returns, raising execution risk if returns do not recover.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated capital program / rate-base growth
A CAD 12B, five-year capital program focused on regulated utilities implies sustained additions to rate base that typically earn allowed returns under regulator frameworks. This drives multi-year predictable revenue and earnings visibility, supporting durable cash flows and long-term growth in regulated earnings.
Read all positive factors
Canadian Utilities A (CU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$14.08B
Dividend Yield3.57%
Average Volume (3M)422.49K
Price to Earnings (P/E)323.1
Beta (1Y)0.15
Revenue Growth1.16%
EPS Growth-89.49%
CountryCA
Employees8,632
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)0.16
Shares Outstanding205,731,740
10 Day Avg. Volume547,242
30 Day Avg. Volume422,489
Financial Highlights & Ratios
PEG Ratio-3.17
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$54.80Price Target Upside-1.88% Downside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)2.59
Revenue Forecast (FY)C$4.23B
Canadian Utilities A Business Overview & Revenue Model
Company Description
Canadian Utilities Limited, together with its subsidiaries, engages in the electricity, natural gas, renewables, pipelines, and liquids businesses in Canada, Australia, and internationally. It operates through ATCO Energy Systems, ATCO EnPower, AT...
How the Company Makes Money
Canadian Utilities primarily makes money through regulated utility operations. Under this model, its main revenue streams are (1) distribution and transmission charges for delivering electricity and natural gas to end customers and (2) rates and t...
Canadian Utilities A Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call emphasized multiple operational and regulatory achievements (strong Q2 earnings up 16%, CAD 160 million increase in operating cash flow, successful project completions, Yellowhead Pipeline approval and 100% contracting, and a CAD 12 billion five-year capital program with a 6.9% CAGR). These positives outweigh the noted challenges—renewable portfolio headwinds at EnPower, timing uncertainty on interprovincial interties, and standard forward-looking/regulatory risks. Overall, the message was constructive with clear growth initiatives and financing plans that avoid near-term common equity dilution.Positive Updates
Strong Quarterly Earnings Growth
Adjusted earnings of CAD 140 million in Q2 2026 vs CAD 121 million in Q2 2025, representing a 16% year-over-year increase driven by inflation indexing on rate base, higher rates in ATCO Gas Australia, and rate base growth in ATCO Energy Systems.
Negative Updates
Headwinds in Renewable Generation
ATCO EnPower continues to face challenges in the renewable portfolio; adjusted earnings were modest (CAD 15 million for the quarter) and described as achieved 'despite the continued headwinds,' signaling limited near-term upside in renewables.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarterly Earnings Growth
Adjusted earnings of CAD 140 million in Q2 2026 vs CAD 121 million in Q2 2025, representing a 16% year-over-year increase driven by inflation indexing on rate base, higher rates in ATCO Gas Australia, and rate base growth in ATCO Energy Systems.
Read all positive updates
Company Guidance
Management reiterated a disciplined growth and financing plan anchored by a CAD 12 billion capital program over the next five years (implying a 5‑year CAGR of 6.9% driven by regulated utilities and Yellowhead), highlighted Yellowhead Pipeline being 100% contracted with construction starting August 2026 and expected in‑service in Q4 2027 (with 100% of CWIP placed into rate base for 2026–2027 and a capital deferral account approved), confirmed gas storage expansions (Carbon Storage Hub and Alberta Hub) to enter commercial operation in Q3 2026 increasing storage to ~130 PJ, reported Q2 adjusted earnings of CAD 140M (up 16% from CAD 121M in Q2 2025) with ATCO Energy Systems CAD 124M (+CAD 8M YoY), ATCO EnPower CAD 15M, and ATCO Australia CAD 34M (+CAD 13M YoY), noted Australia inflation indexing rose to 4.2% (from 3.4% in 2025) delivering ~CAD 9M of incremental earnings and ~CAD 1.2M benefit per 10 bps of inflation, operating cash flow grew by CAD 160M YoY, and the funding plan contemplates annual debenture issuance, CAD 700M raised in late 2025 plus ~CAD 850M of additional capital securities (with no common equity anticipated for regulated growth and non‑regulated projects financed via cash flow, project debt and partnerships).Canadian Utilities A Financial Statement Overview
Summary
Income Statement
48
Neutral
Balance Sheet
52
Neutral
Cash Flow
57
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.76B | 3.69B | 3.74B | 3.80B | 4.05B | 3.52B |
| Gross Profit | 938.00M | 914.00M | 1.44B | 1.45B | 1.72B | 1.36B |
| EBITDA | 2.01B | 2.00B | 1.76B | 2.03B | 1.80B | 1.53B |
| Net Income | 124.00M | 119.00M | 480.00M | 707.00M | 632.00M | 393.00M |
Balance Sheet | ||||||
| Total Assets | 24.60B | 24.54B | 23.79B | 23.16B | 21.97B | 21.07B |
| Cash, Cash Equivalents and Short-Term Investments | 490.00M | 921.00M | 332.00M | 356.00M | 698.00M | 746.00M |
| Total Debt | 12.14B | 12.44B | 11.11B | 10.59B | 9.59B | 9.57B |
| Total Liabilities | 17.82B | 17.94B | 16.67B | 16.00B | 14.91B | 14.25B |
| Stockholders Equity | 6.57B | 6.38B | 6.91B | 6.94B | 6.88B | 6.63B |
Cash Flow | ||||||
| Free Cash Flow | 220.00M | 103.00M | 322.00M | -12.00M | 771.00M | 497.00M |
| Operating Cash Flow | 1.59B | 1.54B | 1.92B | 1.33B | 2.14B | 1.72B |
| Investing Cash Flow | -1.60B | -1.64B | -1.41B | -2.25B | -1.26B | -1.26B |
| Financing Cash Flow | 302.00M | 846.00M | -790.00M | 434.00M | -932.00M | -478.00M |
Canadian Utilities A Technical Analysis
Negative
55.85
Price Trends
52.93
Negative
50.76
Positive
46.99
Positive
Market Momentum
-0.07
Positive
40.50
Neutral
56.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CU, the sentiment is Negative. The current price of 55.85 is above the 20-day moving average (MA) of 53.73, above the 50-day MA of 52.93, and above the 200-day MA of 46.99, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 40.50 is Neutral, neither overbought nor oversold. The STOCH value of 56.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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% | |
62 Neutral | C$7.51B | 45.91 | 3.90% | 2.57% | 4.81% | -58.62% | |
59 Neutral | C$14.08B | 323.13 | 1.88% | 3.29% | 1.16% | -89.49% | |
58 Neutral | C$10.32B | 122.81 | 2.31% | 3.85% | 28.71% | -83.38% | |
49 Neutral | C$6.05B | 31.34 | 3.20% | 4.17% | 5.62% | ― | |
48 Neutral | C$5.31B | -65.61 | -1.50% | 1.37% | -9.61% | 54.17% | |
47 Neutral | C$7.41B | -14.07 | 25.58% | 4.16% | 0.27% | 69.31% |
* Utilities Sector Average
TSE:CU
Canadian Utilities A
51.70
15.08
41.17%
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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.