Analyst Brent Stadler of Desjardins maintained a Buy rating on Capital Power, retaining the price target of C$83.00.
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Brent Stadler has given his Buy rating due to a combination of factors that highlight Capital Power’s strong growth potential and strategic positioning. The company’s recent third-quarter results exceeded market expectations, driven by robust demand in its Flexgen segments and better-than-anticipated performance from newly acquired assets like Hummel and Rolling Hills. Additionally, the announcement of a 250MW datacentre at the Midland site is anticipated to significantly enhance the company’s net asset value and EBITDA, further boosting shareholder value.
Moreover, the outlook for Alberta’s power prices is promising, with expected increases in spark spreads that could lead to substantial earnings growth. Capital Power’s strategic focus on contracting and recontracting opportunities in the U.S. is also seen as a low-risk, high-return endeavor, enhancing its financial stability. The company’s discounted valuation, high yield, and low payout ratio make it an attractive investment, solidifying its position as a preferred name in the sector.
In another report released today, BMO Capital also maintained a Buy rating on the stock with a C$79.00 price target.