TransAlta (TA) AI Stock Analysis

• Market Cap: C$5.39B
• Dividend Yield: 1.46%
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: -11.00%
• EPS Growth: -227.07%
• Country: CA
• Employees: 1,165
• Sector: Utilities
• Sector Strength: 65
• Industry: Independent Power Producers
• EPS (TTM): -0.06
• Shares Outstanding: 296,800,000
• 10 Day Avg. Volume: 1,038,161
• 30 Day Avg. Volume: 1,149,749
• PEG Ratio: 0.18
• Price to Book (P/B): 3.69
• Price to Sales (P/S): 2.14
• P/FCF Ratio: 12.99
• 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$23.19
• Price Target Upside: 27.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 0.41
• Revenue Forecast (FY): C$2.14B

• Rating: 55 Neutral
• Price Target: C$19.00 ▲(4.57% Upside)
• Action: Reiterated Date: 03/02/26
• Date: Action: Reiterated 03/02/26

The score is held back primarily by weakened profitability and a highly leveraged balance sheet, despite strong operating/free cash flow. Technicals are moderately supportive, and the earnings call adds a modest позитиве tilt via reaffirmed guidance and extended credit facilities. Valuation is constrained by the negative P/E and only a modest dividend yield.

Positive Factors

Cash generation

TransAlta's strong operating and free cash flow in 2025 demonstrates durable cash-generation from its generation portfolio and hedged contracts. Reliable cash supports debt servicing, dividend continuity and project funding, giving the company flexibility despite episodic earnings volatility.

Diversified generation mix

A diversified fleet across renewables and thermal assets reduces single-market exposure and smooths merchant volatility. The mix supports long-term contract sales, grid services and transition opportunities to cleaner energy, aligning with regulatory trends favoring renewables.

Improved financial flexibility

Extending $2.1B of credit facilities lengthens maturities and eases near-term refinancing pressure, lowering liquidity risk. This preserves optionality to fund growth projects, support dividend policy and manage rate-sensitive debt while the company works to stabilize earnings.

Negative Factors

High leverage

Elevated leverage and a shrinking equity base increase refinancing, interest-rate and covenant risks over the medium term. With volatile earnings, the aggressive capital structure limits flexibility for capital allocation and raises the probability of higher financing costs during market stress.

Earnings deterioration

A swing to a 2025 net loss and compressed margins indicate structural pressures—lower merchant prices, higher below-the-line charges and interest burden. Persistent earnings weakness would strain retained earnings, hinder deleveraging and make cash generation more cyclical.

Execution & regulatory risk on growth projects

Data-center development offers material incremental demand but relies on protracted customer negotiations and regulatory approvals. Execution delays or failure to finalize long-term PPAs would postpone contracted load growth and defer the intended revenue and return benefits.

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 operates hydro, wind and solar, natural gas-fired, and coal-fired facilities. The company also engages in wholesale trading of electricity and other energy-related commodities and derivatives; and related mining operations and natural gas pipeline operations. It serves municipalities, medium and large industries, businesses, and utility customers. The company was founded in 1909 and is headquartered in Calgary, Canada.

How the Company Makes Money

TransAlta generates revenue primarily through the sale of electricity to wholesale and retail markets. The company operates a mix of generation facilities, which allows it to monetize power generated from various sources, including renewable energy, that typically have lower operational costs. Key revenue streams include power sales contracts, where TransAlta enters into long-term agreements to supply electricity at fixed or variable prices. Additionally, the company benefits from ancillary services such as capacity and balancing services that support grid stability. Partnerships with local utilities and participation in power purchase agreements enhance its revenue stability. Factors contributing to its earnings include market demand for electricity, regulatory policies favoring renewable energy, and operational efficiency in its power generation assets.

TransAlta Financial Statement Overview

Summary

Overall fundamentals are pressured: the income statement deteriorated into a 2025 net loss with sharp margin compression, and the balance sheet is highly leveraged with worsening debt-to-equity. Offsetting this, operating and free cash flow remained solid and improved in 2025, supporting liquidity despite weaker reported earnings.

Income Statement

Earnings quality and trend have weakened materially: revenue declined in 2024 and 2025 (2025 down ~3% year over year), and profitability swung from solid profits in 2023–2024 to a net loss in 2025. Margins also compressed sharply, with 2025 showing negative operating profitability despite still-positive EBITDA, suggesting higher depreciation/impairments, interest burden, or other below-the-line pressures. Strengths include a historically strong 2023 and a business model that can generate meaningful EBITDA, but the latest year’s loss and margin deterioration weigh heavily.

Balance Sheet

Leverage is elevated and has worsened recently: debt-to-equity moved higher to ~3.2x in 2025 from ~2.6x in 2024, while equity declined. Returns to shareholders also turned negative in 2025 following positive results in 2023–2024, reflecting both weaker earnings and a thinner equity cushion. The company has significant asset base support, but the capital structure looks aggressive for a period of earnings volatility, increasing refinancing and rate-sensitivity risk.

Cash Flow

Cash generation is a relative bright spot: operating cash flow remained healthy in 2025 (~$646M) and free cash flow was positive (~$397M) with strong growth versus the prior year. That said, cash flow has been inconsistent over the cycle (including negative free cash flow in 2022), and cash conversion versus accounting earnings is mixed, especially with 2025 posting a net loss. Overall, the business demonstrates the ability to generate cash, but stability is not yet best-in-class.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.41B	2.85B	3.35B	2.98B	2.72B
Gross Profit	785.00M	1.14B	1.64B	1.11B	978.00M
EBITDA	414.00M	1.16B	1.71B	1.24B	1.17B
Net Income	-138.00M	229.00M	695.00M	50.00M	-537.00M
Balance Sheet
Total Assets	8.66B	9.50B	8.66B	10.74B	9.23B
Cash, Cash Equivalents and Short-Term Investments	283.00M	337.00M	348.00M	1.13B	947.00M
Total Debt	4.48B	4.56B	4.21B	4.41B	4.00B
Total Liabilities	7.20B	7.66B	7.00B	8.75B	6.63B
Stockholders Equity	1.40B	1.75B	1.54B	1.11B	1.58B
Cash Flow
Free Cash Flow	397.00M	475.00M	576.00M	-72.00M	512.00M
Operating Cash Flow	646.00M	796.00M	1.46B	877.00M	1.00B
Investing Cash Flow	-411.00M	-519.00M	-815.00M	-741.00M	-471.00M
Financing Cash Flow	-362.00M	-291.00M	-1.43B	45.00M	-282.00M

TransAlta Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.17
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TA, the sentiment is Positive. The current price of 18.17 is above the 20-day moving average (MA) of 18.04, above the 50-day MA of 17.65, and above the 200-day MA of 17.75, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 51.32 is Neutral, neither overbought nor oversold. The STOCH value of 65.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TA.

TransAlta Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPX	64 Neutral	C$9.80B	22.26	9.40%	4.44%	-2.99%	-32.11%
CU	58 Neutral	C$13.04B	310.36	8.84%	4.33%	-0.94%	25.64%
NPI	58 Neutral	C$5.63B	-33.26	-7.06%	6.80%	-4.86%	-86.64%
TA	55 Neutral	C$5.39B	-28.38	-9.02%	1.46%	-11.00%	-227.07%
ACO.X	54 Neutral	C$6.60B	48.97	9.32%	3.62%	7.75%	11.25%
AQN	54 Neutral	$7.30B	-173.67	2.04%	4.32%	-4.72%	96.98%

TransAlta Corporate Events

TransAlta Sets February 27 Date to Unveil 2025 Results and 2026 Guidance

TransAlta Corporation will release its fourth quarter and full-year 2025 financial results before markets open on February 27, 2026, and will host a same-day conference call and webcast to discuss the results and provide its 2026 annual guidance. The event, targeted at investors, analysts, media and other stakeholders, will be accompanied by supporting materials, a replay and a transcript made available on the company’s website, underscoring TransAlta’s ongoing efforts to maintain transparency and engagement with the capital markets as it advances its power generation and sustainability strategy.

The most recent analyst rating on (TSE:TA) stock is a Hold with a C$17.00 price target. To see the full list of analyst forecasts on TransAlta stock, see the TSE:TA Stock Forecast page.

TransAlta to Temporarily Mothball Sheerness Unit 1 to Preserve Market Flexibility

TransAlta’s subsidiary Alberta Power (2000) Ltd. has notified the Alberta Electric System Operator that it will temporarily mothball Sheerness Unit 1, an Alberta thermal power unit, effective April 1, 2026, for up to two years, while keeping the unit available through the winter and leaving Sheerness Unit 2 fully operational. Management framed the move as a prudent financial step to preserve the long-term optionality of the asset, indicating the unit could be returned to service when market conditions or contracting opportunities improve, underscoring the company’s strategy to optimize its thermal portfolio while advancing its data centre plans and maintaining flexibility in Alberta’s evolving power market.

The most recent analyst rating on (TSE:TA) stock is a Hold with a C$19.50 price target. To see the full list of analyst forecasts on TransAlta stock, see the TSE:TA Stock Forecast page.

TransAlta Ordered to Keep Centralia Unit 2 Operational for Energy Reliability

TransAlta Corporation has announced that its subsidiary, TransAlta Centralia Generation LLC, received an order from the U.S. Department of Energy mandating that Centralia Unit 2 in Washington State remain operational for 90 days until March 16, 2026. The decision underscores the unit’s strategic importance in meeting immediate power generation needs. TransAlta is reviewing the order while working collaboratively with federal and state authorities, potentially influencing its operational strategy and reinforcing its role in energy reliability during critical periods.

The most recent analyst rating on (TSE:TA) stock is a Hold with a C$19.50 price target. To see the full list of analyst forecasts on TransAlta stock, see the TSE:TA Stock Forecast page.

TransAlta Declares Quarterly Dividends, Reinforcing Shareholder Value

TransAlta Corporation has announced the declaration of quarterly dividends for its common and preferred shares, with payments scheduled for April 1, 2026. This move underscores TransAlta’s commitment to delivering shareholder value and reflects its strong financial position. The announcement may positively impact investor confidence and highlights the company’s ongoing efforts to maintain stable returns for its stakeholders.

The most recent analyst rating on (TSE:TA) stock is a Hold with a C$19.50 price target. To see the full list of analyst forecasts on TransAlta stock, see the TSE:TA Stock Forecast page.

TransAlta’s Centralia Facility to Undergo Coal-to-Gas Conversion

TransAlta has signed a long-term agreement with Puget Sound Energy to convert its Centralia Unit 2 facility in Washington from coal to natural gas, ensuring a 700 MW capacity. This conversion will extend the facility’s life, reduce emissions by 50%, and align with clean energy laws, while generating long-term contracted cash flow for TransAlta. The project, requiring approximately $600 million in capital expenditures, is expected to commence operations by late 2028 and continue until 2044, pending regulatory approvals.

The most recent analyst rating on (TSE:TA) stock is a Hold with a C$19.50 price target. To see the full list of analyst forecasts on TransAlta stock, see the TSE:TA Stock Forecast page.