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AltaGas Ltd. (TSE:ALA)
TSX:ALA

AltaGas (ALA) AI Stock Analysis

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AltaGas

(TSX:ALA)

Rating:67Neutral
Price Target:
C$41.00
▲(6.58%Upside)
AltaGas' overall score is supported by strong financial performance and positive corporate events. Technical analysis suggests a cautious stance, with the valuation indicating fair pricing. The earnings call reflected strong operational performance but highlighted some financial challenges and market uncertainties.
Positive Factors
Financial Performance
AltaGas has delivered strong Q4 results, exceeding guidance for the sixth consecutive year.
Market Reaction
The market reacted positively to AltaGas's results, with shares rising 3.5% likely due to enthusiasm about a potential sale and positive data center commentary.
Negative Factors
Debt Management
AltaGas maintains a focus on debt reduction driven by self-funded organic growth and attractive relative valuation.

AltaGas (ALA) vs. iShares MSCI Canada ETF (EWC)

AltaGas Business Overview & Revenue Model

Company DescriptionAltaGas Ltd. operates as an energy infrastructure company in North America. The company operates through Utilities and Midstream segments. The Utilities segment owns and operates rate-regulated natural gas distribution and storage utilities in Maryland, Virginia, Delaware, Pennsylvania, Ohio, and the District of Columbia serving approximately 1.7 million customers. This segment also provides interstate natural gas transportation and storage services. The Midstream segment engages in the natural gas gathering and extraction with 1.2 billion cubic feet per day (Bcf/d) of extraction processing capacity and approximately 1.2 Bcf/d of raw field gas processing capacity; natural gas gathering and extraction business; fractionation and liquids handling business; and natural gas and natural gas liquids marketing activities. It also engages in LPG exports and distribution, logistics, trucking and rail terminals, and liquid storage businesses. In addition, the company operates gas-fired power generation and distribution assets with a generating capacity of 578 MW of power in California and Colorado. It serves residential, commercial, and industrial customers primarily in the Western Canada Sedimentary Basin. AltaGas Ltd. was founded in 1994 and is headquartered in Calgary, Canada.
How the Company Makes MoneyAltaGas generates revenue through a diversified model comprising three key segments. In the Midstream segment, the company earns money by processing, transporting, and storing natural gas and natural gas liquids (NGLs). This involves fee-based contracts, where AltaGas charges fees for these services, providing stable cash flows. In the Utilities segment, revenue is derived from the distribution of natural gas to residential, commercial, and industrial customers through regulated utility operations, primarily in Canada and the United States. These operations are subject to regulation, which ensures a steady income stream through set rates approved by regulatory bodies. Finally, in the Power segment, AltaGas makes money by generating and selling electricity. The company owns and operates renewable power assets, including hydroelectric and wind power facilities, and sells the generated power through power purchase agreements and on the wholesale market. Strategic partnerships and long-term contracts with utility companies and other energy firms play a significant role in stabilizing and enhancing AltaGas's revenue streams.

AltaGas Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: -4.94%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in the company's utilities segment and record export volumes, alongside strong progress in midstream projects. However, financial challenges in the midstream segment and market volatility due to global tariff issues were notable concerns.
Q1-2025 Updates
Positive Updates
Record Global Export Volume
AltaGas achieved a record first-quarter global export volume of more than 119,000 barrels per day of LPGs to Asia, marking a significant milestone in their export operations.
Utilities Segment Growth
The Utilities segment delivered normalized EBITDA of $501 million, a 15% increase year-over-year, driven by colder weather and active cost management.
Strong Progress on Midstream Projects
Continued progress on the REEF and Pipestone II midstream growth projects, with significant advancements in construction and contracting.
Normalized EBITDA Increase
The company reported a normalized EBITDA of $689 million, 4% higher than Q1 2024, reflecting ongoing business optimization.
Increased Long-term Contracting
AltaGas exceeded its global exports tolling target of 100,000 barrels per day for 2027, demonstrating strong demand and contract stability.
Negative Updates
Midstream Segment Financial Decline
Normalized EBITDA in the Midstream segment decreased to $197 million from $247 million year-over-year due to lower global export margins and the absence of favorable one-time items.
Impact of Tariff War
Global trade uncertainty, particularly the tariff war, affected propane pricing and export dynamics, creating market volatility.
Lower Contribution from Mountain Valley Pipeline
Post-service equity earnings from the Mountain Valley Pipeline were lower due to depreciation and amortization compared to the previous construction phase.
Company Guidance
During the AltaGas First Quarter 2025 Financial Results Conference Call, the company provided guidance reflecting its strategic priorities and strong performance. AltaGas reported a normalized EBITDA of $689 million in Q1 2025, up 4% from Q1 2024, and a normalized EPS of $1.15, slightly higher than the $1.14 per share from the previous year. The company has exceeded its global exports tolling target of 100,000 barrels per day for the 2027 NGL year, with a record first quarter global export volume of more than 119,000 barrels per day of LPGs to Asia. Utilities saw a 15% increase in normalized EBITDA to $501 million, driven by 13% higher heating degree days. AltaGas plans to deploy $1.4 billion in capital in 2025, with 51% allocated to Utilities and 45% to Midstream, including investments in its Pipestone II and REEF projects. The firm remains focused on reducing financial leverage, targeting a 4.65 times net debt to normalized EBITDA metric. The 2025 guidance includes a normalized EPS range of $2.10 to $2.30 and normalized EBITDA between $1.775 billion and $1.875 billion.

AltaGas Financial Statement Overview

Summary
AltaGas demonstrates strong financial performance with consistent revenue growth, stable profit margins, and robust cash flow generation. The balance sheet is solid with manageable leverage, supporting ongoing financial obligations and growth investments.
Income Statement
75
Positive
AltaGas exhibits strong income statement performance with consistent revenue growth, though recent periods show a slight decline. Gross profit margins are robust, and the company maintains healthy EBIT and EBITDA margins. The net profit margin is stable, reflecting good cost control despite competitive pressures.
Balance Sheet
70
Positive
The balance sheet reveals a solid equity base with a moderate debt-to-equity ratio, indicating reasonable leverage. Return on equity is decent, showing effective use of equity capital, while the equity ratio suggests a stable asset base with sufficient shareholder equity.
Cash Flow
68
Positive
Cash flow analysis indicates positive free cash flow growth, although fluctuations in operating cash flow and capital expenditures are observed. The operating cash flow to net income ratio is healthy, showing efficient cash conversion from profits, albeit slight volatility in free cash flow.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
12.89B12.45B13.00B14.09B10.57B5.59B
Gross Profit
3.16B3.25B2.88B2.95B2.87B2.41B
EBIT
1.26B1.09B1.39B1.03B711.00M746.00M
EBITDA
1.67B1.62B1.70B1.48B1.41B1.34B
Net Income Common Stockholders
581.00M596.00M673.00M399.00M283.00M552.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
197.00M85.00M95.00M53.00M63.00M32.00M
Total Assets
26.16B26.09B23.47B23.96B21.59B21.53B
Total Debt
10.40B10.57B9.88B10.17B8.71B8.64B
Net Debt
10.20B10.48B9.78B10.12B8.64B8.61B
Total Liabilities
16.69B17.05B15.61B16.35B13.99B13.87B
Stockholders Equity
9.09B8.75B7.71B7.46B6.95B7.04B
Cash FlowFree Cash Flow
146.00M149.00M178.00M-419.00M-76.00M-70.00M
Operating Cash Flow
1.61B1.54B1.12B539.00M738.00M773.00M
Investing Cash Flow
-1.39B-1.38B-199.00M-997.00M-483.00M-1.21B
Financing Cash Flow
-129.00M-175.00M-882.00M435.00M-245.00M392.00M

AltaGas Technical Analysis

Technical Analysis Sentiment
Positive
Last Price38.47
Price Trends
50DMA
38.43
Positive
100DMA
37.20
Positive
200DMA
35.19
Positive
Market Momentum
MACD
0.09
Negative
RSI
54.36
Neutral
STOCH
43.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ALA, the sentiment is Positive. The current price of 38.47 is above the 20-day moving average (MA) of 38.18, above the 50-day MA of 38.43, and above the 200-day MA of 35.19, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 54.36 is Neutral, neither overbought nor oversold. The STOCH value of 43.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ALA.

AltaGas Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
$15.28B10.016.42%5.16%4.47%-73.86%
TSALA
67
Neutral
$11.51B20.416.56%3.28%2.27%-9.19%
$2.87B24.4517.23%4.99%
$2.26B8.6016.78%
TSKEY
76
Outperform
C$10.14B18.5819.55%4.70%8.00%52.89%
TSPKI
67
Neutral
C$6.73B34.316.21%3.73%-9.79%-49.13%
TSSPB
65
Neutral
C$1.85B36.972.90%2.23%5.71%320.62%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ALA
AltaGas
38.47
9.01
30.58%
GBNXF
Gibson Energy
17.51
1.62
10.20%
NUVSF
NuVista Energy
11.49
1.44
14.33%
TSE:KEY
Keyera Corp.
44.27
9.31
26.63%
TSE:PKI
Parkland
38.60
2.40
6.63%
TSE:SPB
Superior Plus
8.07
-0.48
-5.61%

AltaGas Corporate Events

Business Operations and Strategy
AltaGas Secures Expanded LPG Export Agreement with Keyera
Positive
Jun 9, 2025

AltaGas has announced a new long-term tolling agreement with Keyera Corp., which will see an additional 12,500 barrels per day of liquified petroleum gases flow through AltaGas’ west coast export facilities starting in 2028. This agreement, which builds on a previous contract, increases Keyera’s total LPG export capacity to 25,000 barrels per day, aimed at accessing premium markets in Asia. The deal underscores AltaGas’ strategic focus on market diversification and leveraging its global exports platform to mitigate tariff impacts and connect Canadian energy products to high-value global markets. Construction on the Ridley Island Energy Export Facility is progressing, with significant milestones achieved, further de-risking the project execution.

The most recent analyst rating on (TSE:ALA) stock is a Buy with a C$40.00 price target. To see the full list of analyst forecasts on AltaGas stock, see the TSE:ALA Stock Forecast page.

Executive/Board ChangesShareholder Meetings
AltaGas Confirms Board of Directors Election Results
Positive
May 2, 2025

AltaGas Ltd. announced the successful election of its board of directors during the 2025 Annual and Special Meeting of Shareholders. All management-recommended nominees were elected, indicating strong shareholder support and stability in the company’s governance, which is crucial for maintaining its strategic direction and growth in the energy infrastructure sector.

Business Operations and StrategyFinancial Disclosures
AltaGas Reports Strong Q1 2025 Results and Exceeds Export Targets
Positive
May 1, 2025

AltaGas Ltd. reported strong financial results for the first quarter of 2025, with a notable increase in normalized EBITDA driven by robust performance in its Utilities segment. The company achieved record global export volumes of LPGs to Asia and continued to secure long-term contracts, surpassing its 2027 tolling target. Despite a decrease in Midstream segment earnings due to lower export margins and the absence of one-time items from the previous year, AltaGas maintained a positive outlook for long-term growth.

Shareholder MeetingsFinancial Disclosures
AltaGas to Announce Q1 2025 Results and Hold Shareholder Meeting
Neutral
Apr 4, 2025

AltaGas Ltd. announced it will release its first quarter 2025 financial results on May 1, 2025, followed by a conference call and webcast to discuss the results and other corporate developments. The company will also hold its Annual and Special Meeting of Shareholders on the same day, providing shareholders with the opportunity to vote virtually or in advance. This announcement underscores AltaGas’ commitment to transparency and stakeholder engagement, potentially impacting its market perception and shareholder relations.

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.