Transalta Corp. (TSE:TA)
TSX:TA
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TransAlta
(TSX:TA)
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Rating:51Neutral
Price Target:
C$17.50
▲(0.81% Upside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by weakening profitability and a highly leveraged balance sheet, despite strong operating and free cash flow. Technicals are largely neutral with the stock below key longer-term moving averages, and valuation is unattractive due to a very high P/E with only a modest dividend yield. The latest earnings call adds some support via hedging coverage, liquidity actions, and defined 2026 guidance, but near-term headwinds (power prices and Centralia downtime) limit upside confidence.
Positive Factors
Strong cash generation
Sustained operating and free cash flow provides durable internal funding for capex, debt paydown and project development. Strong cash generation cushions merchant volatility and underpins the company’s ability to finance Centralia conversion and growth without immediate reliance on dilutive equity.
Negative Factors
High leverage
A debt-heavy capital structure limits financial flexibility and increases interest and refinancing risk if earnings remain pressured. High leverage constrains ability to fund large conversions or growth without additional debt or asset sales and raises vulnerability to prolonged low power prices.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained operating and free cash flow provides durable internal funding for capex, debt paydown and project development. Strong cash generation cushions merchant volatility and underpins the company’s ability to finance Centralia conversion and growth without immediate reliance on dilutive equity.
Read all positive factors
TransAlta (TA) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.23B
Dividend Yield1.46%
Average Volume (3M)1.28M
Price to Earnings (P/E)104.5
Beta (1Y)0.98
Revenue Growth-16.72%
EPS Growth-125033.33%
CountryCA
Employees1,165
SectorUtilities
Sector Strength65
IndustryIndependent Power Producers
Share Statistics
EPS (TTM)-0.76
Shares Outstanding296,800,000
10 Day Avg. Volume1,001,117
30 Day Avg. Volume1,281,889
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)3.69
Price to Sales (P/S)2.14
P/FCF Ratio12.99
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$24.00Price Target Upside38.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.31
Revenue Forecast (FY)C$2.08B
TransAlta Business Overview & Revenue Model
Company Description
TransAlta Corporation owns, operates, and develops a diverse fleet of electrical power generation assets in Canada, the United States, and Australia. It operates through four segments: Hydro, Wind and Solar, Gas, and Energy Transition. owns and op...
How the Company Makes Money
TransAlta makes money primarily by generating electricity and selling it through a mix of (1) contracted arrangements and (2) merchant/market-based sales. (a) Contracted/PPAs: A portion of its facilities sell output under power purchase agreements...
TransAlta Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
Earnings Call Sentiment Positive
The call balanced strong strategic execution and capital allocation actions (MOU for a large data-center opportunity, Centralia tolling agreement and conversion plan, accretive Far North acquisition, improved liquidity via $2.1B facilities, record safety, dividend increase and early achievement of emissions targets) against a challenging near-term operating backdrop driven by significantly lower Alberta spot power prices, subdued market volatility that reduced merchant and energy marketing results, Centralia operational constraints due to a DOE order, and timing/approval risks for data center development. Management presented clear mitigation levers (hedging, contracted fleet ~80% of expected revenue, asset optionality and funding flexibility) and a path to fund growth, but near-term financial metrics and guidance are pressured by market conditions and Centralia downtime.Positive Updates
Full-Year Adjusted EBITDA and Free Cash Flow
Reported full-year adjusted EBITDA of $1.1 billion. Management reported free cash flow as $514 million (Joel Hunter), above the midpoint of guidance; an earlier comment by management referenced $415 million (John Kousinioris), reflecting an inconsistency in the call transcript. Free cash flow per share was reported at $1.73 (Joel).
Negative Updates
Lower Alberta Power Prices and Market Volatility
Alberta spot prices averaged materially lower in 2025 (~$44/MWh reported versus ~$63/MWh in 2024, ~30% decline year-over-year). Management expects continued pressure on Alberta spot prices in 2026 in a $40–$60/MWh range, which negatively impacts merchant revenues.
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Adjusted EBITDA and Free Cash Flow
Reported full-year adjusted EBITDA of $1.1 billion. Management reported free cash flow as $514 million (Joel Hunter), above the midpoint of guidance; an earlier comment by management referenced $415 million (John Kousinioris), reflecting an inconsistency in the call transcript. Free cash flow per share was reported at $1.73 (Joel).
Read all positive updates
Company Guidance
TransAlta's 2026 guidance calls for adjusted EBITDA of C$950 million–C$1.1 billion (midpoint C$1.0 billion) and free cash flow of C$350 million–C$450 million (C$1.18–C$1.51 per share; midpoint C$400 million). Management expects Alberta spot power to run roughly C$40–C$60/MWh, notes that about 80% of expected generation revenue is supported by contracted/hedged positions (approximately 8,500 GWh hedged at an average ~C$65/MWh versus a current forward curve near C$44/MWh, and ~4,000 GWh hedged for 2027 at ~C$71/MWh), and says the outlook excludes any net impact from the DOE 202(c) order (costs expected to be recovered). They also flagged that Centralia is offline in 2026 (conversion requires ~US$600 million capex, target COD late‑2028, FID targeted early 2027), all factors the company says underpin confidence in achieving the guidance midpoints.TransAlta Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
35
Negative
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.21B | 2.41B | 2.85B | 3.35B | 2.98B | 2.72B |
| Gross Profit | 716.00M | 785.00M | 1.14B | 1.64B | 1.11B | 978.00M |
| EBITDA | 511.00M | 414.00M | 1.16B | 1.71B | 1.24B | 1.17B |
| Net Income | -171.00M | -138.00M | 229.00M | 695.00M | 50.00M | -537.00M |
Balance Sheet | ||||||
| Total Assets | 8.79B | 8.66B | 9.50B | 8.66B | 10.74B | 9.23B |
| Cash, Cash Equivalents and Short-Term Investments | 334.00M | 283.00M | 337.00M | 348.00M | 1.13B | 947.00M |
| Total Debt | 4.46B | 4.48B | 4.56B | 4.21B | 4.41B | 4.00B |
| Total Liabilities | 7.31B | 7.20B | 7.66B | 7.00B | 8.75B | 6.63B |
| Stockholders Equity | 1.41B | 1.40B | 1.75B | 1.54B | 1.11B | 1.58B |
Cash Flow | ||||||
| Free Cash Flow | 517.00M | 397.00M | 475.00M | 576.00M | -72.00M | 512.00M |
| Operating Cash Flow | 766.00M | 646.00M | 796.00M | 1.46B | 877.00M | 1.00B |
| Investing Cash Flow | -382.00M | -411.00M | -519.00M | -815.00M | -741.00M | -471.00M |
| Financing Cash Flow | -366.00M | -362.00M | -291.00M | -1.43B | 45.00M | -282.00M |
TransAlta Technical Analysis
Negative
17.36
Price Trends
17.99
Negative
18.06
Negative
18.39
Negative
Market Momentum
0.18
Positive
40.30
Neutral
18.03
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TA, the sentiment is Negative. The current price of 17.36 is below the 20-day moving average (MA) of 18.25, below the 50-day MA of 17.99, and below the 200-day MA of 18.39, indicating a bearish trend. The MACD of 0.18 indicates Positive momentum. The RSI at 40.30 is Neutral, neither overbought nor oversold. The STOCH value of 18.03 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TA.
TransAlta 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% | |
64 Neutral | C$13.14B | 14.84 | 1.59% | 4.33% | -1.26% | -92.43% | |
61 Neutral | C$6.01B | 17.22 | -3.92% | 6.80% | 14.34% | -157.00% | |
59 Neutral | C$6.97B | 12.59 | 3.39% | 3.62% | 2.57% | -63.07% | |
58 Neutral | C$9.98B | 171.62 | 0.49% | 4.44% | 29.58% | -101.22% | |
53 Neutral | C$6.10B | 13.89 | 3.63% | 4.32% | 1.84% | ― | |
51 Neutral | C$5.23B | 104.46 | -11.56% | 1.46% | -16.72% | -125033.33% |
* Utilities Sector Average
TSE:TA
TransAlta
17.63
5.11
40.77%
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TransAlta Corporate Events
Business Operations and StrategyFinancial Disclosures
TransAlta Targets Data Centre-Led Growth and Stronger Cash Flows Through 2029
Positive
Mar 23, 2026
TransAlta used its 2026 Investor Day in Toronto to outline its growth strategy through 2029, emphasizing its strong position in core geographies, especially Alberta, where existing assets and development platforms support expansion. The company hi...
Business Operations and StrategyRegulatory Filings and Compliance
DOE Orders TransAlta’s Centralia Unit 2 to Stay Available for 90 More Days
Neutral
Mar 17, 2026
TransAlta said its TransAlta Centralia Generation subsidiary has received an order from the U.S. Department of Energy requiring Centralia Unit 2 in Washington State to remain available for operation for an additional 90 days, until June 14, 2026. ...
Business Operations and Strategy
TransAlta Adjusts Mix of Series A and B Preferred Shares Through Conversions
Neutral
Mar 17, 2026
TransAlta has confirmed that none of its 9,629,913 outstanding Cumulative Redeemable Rate Reset First Preferred Shares, Series A, will be converted into Series B shares on March 31, 2026. However, 1,148,549 of its 2,370,087 outstanding Series B pr...
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.