Emera (EMA) AI Stock Analysis

• Market Cap: $17.17B
• Dividend Yield: 5.07%
• Average Volume (3M): 1.35M
• Price to Earnings (P/E): 33.7
• Beta (1Y): 0.57
• Revenue Growth: 7.16%
• EPS Growth: -52.28%
• Country: CA
• Employees: 7,605
• Sector: Utilities
• Sector Strength: 88
• Industry: Regulated Electric
• EPS (TTM): 1.71
• Shares Outstanding: 297,700,000
• 10 Day Avg. Volume: 1,805,413
• 30 Day Avg. Volume: 1,353,095
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.41
• Price to Cash Flow (P/CF): 6.20
• P/FCF Ratio: 4.70
• 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$61.04
• Price Target Upside: 5.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Emera's overall stock score reflects a solid financial performance with strengths in cash generation and strategic growth plans. While technical analysis shows a positive trend, the high P/E ratio suggests potential overvaluation. The earnings call and corporate events highlight strong operational performance and strategic positioning for future growth, particularly in Florida.

Positive Factors

Capital Investment

Emera's new $20B five-year capex program is above expectations and focuses on rising electricity demand, clean power integration, and grid modernization.

Earnings Growth

Earnings per share is poised to grow significantly, largely due to new Tampa Electric rates.

Market Sentiment

The upcoming sale of New Mexico Gas is expected to ease credit rating scrutiny and improve market sentiment.

Rate Base Growth

The new $20B 2025-2029 capex program was above expectations and implies a ~7-8% CAGR in rate base by 2029, driven by rising electricity demand and clean power integration.

Negative Factors

Earnings Quality

Investor feedback indicated that the earnings beat was not seen as high quality, driven by tax benefits.

Valuation Concerns

Plans to list in the U.S. are expected to improve trading liquidity and close the valuation discount to U.S. utility peers.

Emera Business Overview & Revenue Model

Company Description

Emera Inc. (EMA) is a geographically diverse energy and services company headquartered in Halifax, Nova Scotia, Canada. The company focuses on the generation, transmission, and distribution of electricity. Emera operates through various subsidiaries across Canada, the United States, and the Caribbean, providing energy solutions and services to residential, commercial, and industrial customers. Its operations are primarily in the regulated electricity market, ensuring stable and predictable cash flows.

How the Company Makes Money

Emera Inc. generates revenue primarily through its regulated utility operations, which involve the generation, transmission, and distribution of electricity to customers. The company earns money by charging customers for the electricity they consume, as well as for access to its transmission and distribution networks. Rates are typically set by regulatory bodies, providing a stable revenue stream. Additionally, Emera engages in natural gas transmission and distribution, further diversifying its income. Key revenue streams include customer energy bills, regulatory-approved tariffs, and infrastructure development projects. Emera's strategic acquisitions and partnerships within the energy sector also contribute to its earnings, expanding its market reach and operational capabilities.

Emera Financial Statement Overview

Summary

Emera shows mixed financial performance with strengths in cash generation and a solid gross profit margin. However, challenges include declining revenue and net profit margins, high leverage, and negative free cash flow, necessitating careful management of debt and operations.

Income Statement

Emera has shown a mixed performance in its income statement. The gross profit margin for the most recent year is approximately 40.2%, indicating solid cost management. However, the net profit margin has decreased to 7.9% from 13.8% the previous year, suggesting a drop in overall profitability. The revenue has declined by about 4.8% compared to the previous year, indicating a challenging market environment. Despite a strong EBITDA margin of 35.5%, the declining EBIT margin at 15% reflects potential operational inefficiencies.

Balance Sheet

The balance sheet of Emera is stable with a debt-to-equity ratio of 1.49, which is relatively high but typical for the utilities industry. The return on equity stands at 4.3%, indicating modest efficiency in generating profits from shareholders' equity. The equity ratio is 30.9%, showing a balanced capital structure, although the high debt load could pose risks if interest rates rise.

Cash Flow

Emera's cash flow statement reflects challenges, with a free cash flow to net income ratio of -0.89, highlighting issues in generating free cash flow from its operations. The operating cash flow to net income ratio is favorable at 4.67, indicating strong cash generation relative to net income. However, the negative free cash flow growth rate of 27.5% from the previous year indicates pressure on liquidity and potential constraints on future investments.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.20B	7.56B	7.59B	5.76B	5.51B
	Gross Profit
2.89B	3.28B	3.02B	2.16B	2.37B
	EBIT
1.08B	1.79B	1.63B	930.00M	1.94B
	EBITDA
2.56B	3.16B	2.69B	1.85B	2.08B
	Net Income Common Stockholders
567.00M	1.04B	1.01B	560.00M	983.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
196.00M	588.00M	310.00M	394.00M	220.00M
	Total Assets
42.95B	39.48B	39.74B	34.24B	31.23B
	Total Debt
19.81B	19.86B	19.04B	16.40B	15.35B
	Net Debt
19.61B	19.27B	18.73B	16.01B	15.13B
	Total Liabilities
29.66B	27.39B	28.30B	24.09B	22.00B
	Stockholders Equity
13.28B	12.07B	11.43B	10.12B	9.20B
Cash Flow		Free Cash Flow
-505.00M	-696.00M	-1.68B	-1.17B	-986.00M
	Operating Cash Flow
2.65B	2.24B	913.00M	1.19B	1.64B
	Investing Cash Flow
-2.22B	-2.92B	-2.57B	-2.33B	-1.22B
	Financing Cash Flow
-818.00M	939.00M	1.55B	1.31B	-372.00M

Emera Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 57.67
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EMA, the sentiment is Negative. The current price of 57.67 is below the 20-day moving average (MA) of 59.51, below the 50-day MA of 57.95, and above the 200-day MA of 52.05, indicating a neutral trend. The MACD of 0.83 indicates Negative momentum. The RSI at 69.61 is Neutral, neither overbought nor oversold. The STOCH value of 84.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:EMA.

Emera Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTS	73 Outperform	$31.44B	19.33	7.47%	3.89%	-0.08%	4.76%
ENB	73 Outperform	$130.27B	25.53	8.63%	6.45%	24.95%	-17.19%
CU	70 Neutral	C$7.24B	23.78	6.93%	5.16%	-1.42%	-36.31%
EMA	69 Neutral	$17.17B	33.75	4.50%	5.07%	7.16%	-52.28%
Sector *	65 Neutral	$11.76B	15.57	6.23%	4.62%	5.52%	-8.96%
AQN	51 Neutral	$5.13B	―	1.65%	7.65%	-6.72%	-6766.85%
BEP.UN	47 Neutral	$20.39B	―	-4.87%	7.12%	22.01%	-183.73%

Emera Corporate Events

Emera Announces CFO Transition to Boost Florida Operations

Emera announced a transition in its Chief Financial Officer role, with Greg Blunden moving to Executive Vice President, Finance, Emera USA. This change aims to strengthen Emera’s financial leadership in Florida, where significant growth is expected, and a substantial portion of the company’s $20 billion capital plan will be invested over the next five years. The company is actively seeking a new CFO to continue its focus on disciplined financial management and support its expanding market.

Emera’s 2024 Financial Report: Strong Utility Performance and Strategic Growth Plans

Emera reported a successful 2024 financial year, with a 33% increase in quarterly adjusted EPS to $0.84, attributed to strong performance across its regulated utilities. Despite a decline in reported EPS due to various charges, the company executed its largest annual capital plan of $3.2 billion, driving a 7% rate base growth. The completion of Tampa Electric’s rate case is expected to significantly boost revenues in the coming years. Emera is strategically positioned to capitalize on organic growth opportunities, particularly in Florida, with a focus on a $20 billion capital plan over five years aimed at improving reliability, grid modernization, and infrastructure expansion.