BMO Capital analyst Benjamin Pham maintained a Buy rating on Brookfield Renewable Partners yesterday and set a price target of $30.00.
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Benjamin Pham has given his Buy rating due to a combination of factors that highlight Brookfield Renewable Partners’ promising growth trajectory and strong financial health. The company’s recent investor day presentation underscored its ambitious growth targets, including a 12% increase in deployment targets and a significant rise in capital recycling efforts, which are expected to exceed US$2 billion annually. This strategic focus is anticipated to accelerate the company’s funds from operations per share (FFO/sh) growth to over 10%, while maintaining a low-risk business profile with approximately 90% of its operations contracted.
Furthermore, Brookfield Renewable Partners’ premium valuation is supported by its above-average growth prospects, with an estimated enterprise value to EBITDA ratio of 15x by 2027, compared to its peers in the renewable sector. The company plans to deploy US$9-10 billion in equity over the next five years, driven by a robust development backlog and strong merger and acquisition opportunities. Additionally, its liquidity position is solid, with around US$4.7 billion available, enhancing its ability to achieve target returns. These factors collectively contribute to Pham’s positive outlook and Buy rating for the stock.
BEP’s price has also changed slightly for the past six months – from $23.380 to $25.520, which is a 9.15% increase.