Utility company Algonquin Power (NYSE:AQN) delivered something of a double whammy to investors earlier today. Needless to say, they couldn’t be much more unhappy about it and sent the share price down significantly. The double-sided slap to investors kicked off with a bang. Algonquin Power cut its dividend from the previous $0.1808 per share to a comparatively meager $0.1085 per share, a reduction of about 40%.
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The company also slashed its dividend reinvestment plan. The cuts taken on these fronts would help improve its overall financial position and give it more options in the field. That’s the word from Algonquin Power president and chief executive Arun Banskota.
The second slap came from adjustments to earnings. Algonquin now expects earnings for the 2023 fiscal year to come in between $0.55 per share and $0.61 per share. Both are well off analyst consensus calling for $0.70 per share. Any of that would be bad enough by itself, but Algonquin also plans an asset sale of $1 billion to pay off its previous debt and drive growth. Banskota once again chimed in on the asset sale, noting that such a move would help “…position the Company for sustainable, long-term growth.”.
Wall Street, meanwhile, seems skeptical. Currently, analyst consensus calls Algonquin Power a Hold. With an average price target of $8.86, Algonquin Power shares have 25.14% upside potential.
