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Algonquin Power & Utilities
(TSX:AQN)
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Rating:49Neutral
Price Target:
C$8.00
▲(1.27% Upside)
Action:Reiterated
Date:08/17/26
The score is held down primarily by weaker financial quality—high leverage, negative free cash flow, and earnings volatility—despite improved revenue momentum. The earnings call adds moderate support via reiterated guidance, constructive regulatory progress, and refinancing actions that maintained investment-grade ratings, but near-term earnings/cost pressures and leverage metrics near a downgrade threshold remain key risks. Technicals and valuation are broadly neutral, with the dividend yield helping offset an elevated P/E.
Positive Factors
Regulatory rate-base growth
Multiple favorable rate decisions and new filings can expand regulated revenue and support recovery of invested capital. This strengthens the utility platform’s earnings visibility over the next several quarters, although execution remains important.
Negative Factors
Elevated leverage limits flexibility
High leverage leaves less room to absorb weaker operating results, higher interest costs or additional capital needs. The reduced FFO-to-debt cushion also increases dependence on disciplined financing and successful regulatory outcomes to protect credit quality.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulatory rate-base growth
Multiple favorable rate decisions and new filings can expand regulated revenue and support recovery of invested capital. This strengthens the utility platform’s earnings visibility over the next several quarters, although execution remains important.
Read all positive factors
Algonquin Power & Utilities (AQN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.66B
Dividend Yield4.81%
Average Volume (3M)2.24M
Price to Earnings (P/E)29.5
Beta (1Y)0.66
Revenue Growth5.62%
EPS GrowthN/A
CountryCA
Employees3,233
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)0.18
Shares Outstanding769,901,900
10 Day Avg. Volume2,307,727
30 Day Avg. Volume2,237,652
Financial Highlights & Ratios
PEG Ratio-0.24
Price to Book (P/B)1.02
Price to Sales (P/S)1.93
P/FCF Ratio-26.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$9.16Price Target Upside16.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.36
Revenue Forecast (FY)C$2.62B
Algonquin Power & Utilities Business Overview & Revenue Model
Company Description
Algonquin Power & Utilities Corp. operates in the power and utility industries. It owns and operates a portfolio of regulated electric, water distribution and wastewater collection, and natural gas utility systems and transmission operations. As o...
How the Company Makes Money
AQN primarily makes money through two business models: (1) regulated utility earnings and (2) power generation sales.
1) Regulated utilities (rate-regulated revenue and returns)
- Revenue stream: Customer bills for electricity and natural gas del...
Algonquin Power & Utilities Earnings Call Summary
Earnings Call Date:Aug 07, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 06, 2026
Earnings Call Sentiment Neutral
The call highlighted strong operational and regulatory progress—multiple rate case wins/filings, project approvals (250 MW CCN and CWIP), a strategic U.S. redomicile plan with anticipated recurring tax and EPS benefits, and balance sheet actions that preserved ratings. However, near-term financial results showed notable declines (GAAP and adjusted earnings), a $17.2M write-down tied to California WEMA, rising interest and operating costs, weather headwinds and pending one-time tax/exit cost uncertainty from the redomicile. Taken together, the positives around long-term strategy and regulatory momentum materially offset—but do not fully outweigh—the short‑term earnings and cost pressures and execution/timing risks.Positive Updates
Regulatory approvals and constructive rate outcomes
Multiple favorable regulatory actions in Q2: Missouri PSC approved implementation of $97 million in annualized revenue adjustments (effective Aug 3); Kansas settlement approved an $8.8 million revenue adjustment and provision for 50% of wind revenues year 1; California WEMA proposed decision authorized ~$58.1 million recovery (~75% of requested). Several new rate filings signal future revenue opportunities (New York Water $38.1M request, EnergyNorth $35.8M request, Empire Electric Arkansas $8.4M). The company is also pursuing FERC treatment to enable projected test year and CWIP for transmission projects.
Negative Updates
Significant year-over-year earnings decline (GAAP and adjusted)
Q2 2026 GAAP net earnings were $4.9 million versus $14.8 million in Q2 2025 (≈ -66.9% YoY). Q2 adjusted net earnings were $29.2 million versus $33.6 million (≈ -13.1% YoY). Year-to-date GAAP net earnings were $88.0 million vs $107.6 million (≈ -18.2% YoY), and YTD adjusted net earnings were $128.8 million vs $142.6 million (≈ -9.7% YoY). YTD adjusted net EPS declined to $0.17 from $0.19 (≈ -10.5%). Q2 adjusted net EPS was flat at $0.04.
Read all updates
Q2-2026 Updates
Positive
Negative
Regulatory approvals and constructive rate outcomes
Multiple favorable regulatory actions in Q2: Missouri PSC approved implementation of $97 million in annualized revenue adjustments (effective Aug 3); Kansas settlement approved an $8.8 million revenue adjustment and provision for 50% of wind revenues year 1; California WEMA proposed decision authorized ~$58.1 million recovery (~75% of requested). Several new rate filings signal future revenue opportunities (New York Water $38.1M request, EnergyNorth $35.8M request, Empire Electric Arkansas $8.4M). The company is also pursuing FERC treatment to enable projected test year and CWIP for transmission projects.
Read all positive updates
Company Guidance
Management reiterated that its adjusted net earnings-per-share forecast for 2026 and 2027 is unchanged and “on track,” noting Q2 adjusted net EPS of $0.04 (flat YoY) with Q2 adjusted net earnings $29.2M (vs. $33.6M) and GAAP net earnings $4.9M (vs. $14.8M); year‑to‑date adjusted net EPS was $0.17 (vs. $0.19) with YTD adjusted net earnings $128.8M (GAAP $88.0M vs. $107.6M). They said no equity issuance is expected through 2027, raised ~$1.15B at Liberty to repay $1.15B of maturing notes, and remain rated BBB (Algonquin S&P/Fitch) and Baa2/BBB at Liberty (Moody’s/S&P–Fitch); FFO/debt was 11.9% this quarter (down from 12.9%) and management expects to remain above S&P’s ~11% downgrade threshold. On the redomicile, they expect an IRS private letter ruling in H2 2026, a shareholder vote in H1 2027 and run‑rate EPS benefits of roughly $0.02–$0.03 (management cited elimination of a ~5% dividend tax on ~$200M of dividends and BEAT on debt service, implying ~2–2.5¢ of recurring benefit), while one‑time Canadian exit/FIRPTA taxes are possible but not yet quantified. Regulatory milestones cited that support near‑term results include Missouri implementation of ~$97M annualized revenue adjustments (effective Aug. 3), Kansas $8.8M, California WEMA proposed recovery of $58.1M (~75% of request) (a $17.2M regulatory asset write‑down was excluded from adjusted results), an Apple Valley/Park Water $2.7M revenue reduction with a $3.1M retroactive true‑up, and new rate filings (NY Water $38.1M at 10% ROE/48% equity, Empire AR $8.4M at 10% ROE/53.4% cap, EnergyNorth $35.8M at 10.25% ROE/52% cap).Algonquin Power & Utilities Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
48
Neutral
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.54B | 2.45B | 2.32B | 2.40B | 2.77B | 2.27B |
| Gross Profit | 1.15B | 587.41M | 845.26M | 836.51M | 1.05B | 858.10M |
| EBITDA | 915.58M | 909.45M | 831.16M | 816.62M | 955.99M | 758.75M |
| Net Income | 148.61M | 184.78M | -1.38B | 28.67M | -211.99M | 264.86M |
Balance Sheet | ||||||
| Total Assets | 13.92B | 14.11B | 16.96B | 18.37B | 17.63B | 16.80B |
| Cash, Cash Equivalents and Short-Term Investments | 55.00M | 32.64M | 34.84M | 25.05M | 57.62M | 125.16M |
| Total Debt | 6.64B | 6.53B | 6.73B | 7.51B | 7.53B | 6.25B |
| Total Liabilities | 8.95B | 9.07B | 10.78B | 11.43B | 10.47B | 9.10B |
| Stockholders Equity | 4.62B | 4.63B | 4.71B | 5.04B | 5.22B | 5.86B |
Cash Flow | ||||||
| Free Cash Flow | -58.16M | -181.42M | -371.94M | -404.59M | -455.94M | -1.17B |
| Operating Cash Flow | 598.58M | 603.99M | 458.59M | 638.22M | 600.67M | 154.82M |
| Investing Cash Flow | -676.53M | 1.19B | 176.05M | -1.00B | -1.47B | -656.52M |
| Financing Cash Flow | 103.02M | -1.85B | -579.38M | 340.20M | 808.32M | 534.21M |
Algonquin Power & Utilities Technical Analysis
Negative
7.90
Price Trends
8.03
Negative
8.14
Negative
8.34
Negative
Market Momentum
-0.15
Positive
33.20
Neutral
11.77
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AQN, the sentiment is Negative. The current price of 7.9 is above the 20-day moving average (MA) of 7.82, below the 50-day MA of 8.03, and below the 200-day MA of 8.34, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 33.20 is Neutral, neither overbought nor oversold. The STOCH value of 11.77 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AQN.
Algonquin Power & Utilities Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$298.14M | 51.33 | 1.73% | 5.95% | -1.18% | ― | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
63 Neutral | C$706.24M | 6,018.75 | 0.20% | ― | 23.90% | ― | |
60 Neutral | C$5.44B | -38.44 | -3.46% | 3.97% | 15.39% | -180.64% | |
51 Neutral | C$28.82B | 63.98 | 2.64% | 5.22% | 5.92% | 52.60% | |
49 Neutral | C$5.66B | 29.47 | 3.20% | 4.81% | 5.62% | ― |
* Utilities Sector Average
TSE:AQN
Algonquin Power & Utilities
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0.09
1.23%
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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.