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Capital Power
(TSX:CPX)
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Rating:58Neutral
Price Target:
C$70.00
▲(6.25% Upside)
Action:Reiterated
Date:07/31/26
The score is anchored by moderately positive financial performance (strong revenue and operating cash flow, but inconsistent profitability, low ROE, and elevated leverage). Earnings call tone and guidance were constructive—reaffirmed 2026 targets, dividend increase, a significant Meta contract, and higher embedded EBITDA upside—supporting the outlook. This is offset by weak near-term technical positioning (below 20/50-day averages) and valuation complexity from a negative P/E, partially mitigated by a solid dividend yield.
Positive Factors
Long-duration contracted cash flows
Converting 250 MW of merchant production into a >10-year ESA materially reduces merchant exposure and lengthens revenue visibility without capex or encumbering assets. Structurally this raises predictable contracted cash flows, improves credit profile and lowers earnings volatility over multi-year horizons.
Negative Factors
Elevated leverage
Above-average leverage (debt-to-equity ~1.46 and up from ~1.12) reduces financial flexibility, raises interest expense sensitivity and limits capacity for opportunistic M&A or accelerated buybacks. Persistently higher leverage increases vulnerability to prolonged weak pricing or regulatory shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Long-duration contracted cash flows
Converting 250 MW of merchant production into a >10-year ESA materially reduces merchant exposure and lengthens revenue visibility without capex or encumbering assets. Structurally this raises predictable contracted cash flows, improves credit profile and lowers earnings volatility over multi-year horizons.
Read all positive factors
Capital Power (CPX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$9.90B
Dividend Yield4.39%
Average Volume (3M)595.80K
Price to Earnings (P/E)117.9
Beta (1Y)1.00
Revenue Growth28.71%
EPS Growth-83.38%
CountryCA
Employees700
SectorUtilities
Sector Strength65
IndustryIndependent Power Producers
Share Statistics
EPS (TTM)0.53
Shares Outstanding157,080,000
10 Day Avg. Volume497,086
30 Day Avg. Volume595,804
Financial Highlights & Ratios
PEG Ratio-0.80
Price to Book (P/B)1.81
Price to Sales (P/S)2.65
P/FCF Ratio187.43
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$83.19Price Target Upside26.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1.38
Revenue Forecast (FY)C$3.94B
Capital Power Business Overview & Revenue Model
Company Description
Capital Power Corporation focuses on developing, acquiring, and operating both sustainable and conventional electricity generation facilities throughout Canada and the United States. The company produces power from a diverse mix of energy sources,...
How the Company Makes Money
Capital Power makes money primarily by generating electricity and selling it into wholesale markets and through contracted arrangements. Its key revenue streams typically include: (1) Electricity sales: revenue earned from selling power produced b...
Capital Power Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong commercial progress (notably the 250 MW Meta ESA), meaningful upgrades to the company’s embedded EBITDA upside (~$1.25B), double-digit YoY generation growth (+12% TWh) and solid quarter-over-quarter financial gains (Q2 adjusted EBITDA +9%, Q2 AFFO +39.6%). Management reaffirmed 2026 guidance, increased the dividend, and highlighted portfolio diversification and capacity upgrade milestones. Near-term headwinds include planned maintenance that weighed on U.S. flexible generation results, elevated sustaining capital and corporate/finance costs, modest solar project timing slips, and external regulatory/social uncertainties that could affect timing of development and recontracting. On balance, the positive commercial wins, financial improvements and expanded embedded upside materially outweigh the operational and timing challenges discussed.Positive Updates
250 MW Long-Term Energy Supply Agreement with Meta
Signed a >10-year energy supply agreement to provide 250 MW of capacity and energy commencing in H2 2028; converts merchant generation into long-duration contracted cash flows with no capital investment and without encumbering assets.
Negative Updates
Lower U.S. Flexible Generation Results in Quarter
Q2 performance from U.S. Flexible Generation was weaker due to planned maintenance outages and lower capacity revenues, partially offsetting gains from expanded PJM portfolio.
Read all updates
Q2-2026 Updates
Positive
Negative
250 MW Long-Term Energy Supply Agreement with Meta
Signed a >10-year energy supply agreement to provide 250 MW of capacity and energy commencing in H2 2028; converts merchant generation into long-duration contracted cash flows with no capital investment and without encumbering assets.
Read all positive updates
Company Guidance
Capital Power reaffirmed 2026 guidance with adjusted EBITDA of $1.565–$1.765 billion, AFFO of $890 million–$1.01 billion and sustaining capital of $290–$330 million (part of a planned maintenance cycle, with ~66% of planned outage days complete), while reporting Q2 adjusted EBITDA of $351 million and Q2 AFFO of $328 million (YTD adjusted EBITDA $755 million; YTD AFFO $482 million). Management increased its estimate of embedded annual adjusted EBITDA upside to ~ $1.25 billion (from ~$1.0 billion), comprised of ~$400–$550 million of contracted upside (largely U.S. flexible gen contract roll-offs 2029–2032 and uprates) and ~$375–$700 million of merchant upside (PJM and stronger Alberta pricing), maintained a target 13%–15% annual TSR, approved a 2% dividend increase (13th consecutive year) and narrowed its growth-rate guidance to 2%–4% while affirming disciplined capital allocation.Capital Power Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
54
Neutral
Cash Flow
61
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.68B | 3.32B | 2.95B | 4.00B | 4.50B | 2.83B |
| Gross Profit | -121.00M | -10.00M | 15.00M | 630.00M | 1.53B | 871.00M |
| EBITDA | 1.17B | 1.08B | 1.57B | 1.62B | 809.00M | 828.00M |
| Net Income | 112.00M | 160.00M | 699.00M | 744.00M | 138.00M | 98.00M |
Balance Sheet | ||||||
| Total Assets | 15.68B | 15.44B | 12.93B | 11.16B | 10.13B | 9.07B |
| Cash, Cash Equivalents and Short-Term Investments | 153.00M | 119.00M | 865.00M | 1.42B | 307.00M | 387.00M |
| Total Debt | 7.14B | 6.88B | 5.11B | 4.86B | 3.88B | 3.50B |
| Total Liabilities | 10.95B | 10.59B | 8.36B | 7.97B | 7.67B | 6.21B |
| Stockholders Equity | 4.74B | 4.86B | 4.58B | 3.19B | 2.45B | 2.84B |
Cash Flow | ||||||
| Free Cash Flow | 186.00M | 47.00M | 5.00M | 45.00M | 217.00M | 214.00M |
| Operating Cash Flow | 1.10B | 911.00M | 1.07B | 768.00M | 899.00M | 836.00M |
| Investing Cash Flow | -852.00M | -3.76B | -1.92B | -807.00M | -910.00M | -565.00M |
| Financing Cash Flow | -407.00M | 2.13B | 271.00M | 1.16B | -66.00M | -244.00M |
Capital Power Technical Analysis
Negative
65.88
Price Trends
68.84
Negative
68.19
Negative
64.26
Negative
Market Momentum
-1.51
Positive
35.66
Neutral
12.67
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CPX, the sentiment is Negative. The current price of 65.88 is above the 20-day moving average (MA) of 65.14, below the 50-day MA of 68.84, and above the 200-day MA of 64.26, indicating a bearish trend. The MACD of -1.51 indicates Positive momentum. The RSI at 35.66 is Neutral, neither overbought nor oversold. The STOCH value of 12.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CPX.
Capital Power Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
60 Neutral | C$5.47B | -38.04 | -3.46% | 4.02% | 15.39% | -180.64% | |
59 Neutral | C$13.86B | 318.19 | 1.88% | 3.62% | 1.16% | -89.49% | |
58 Neutral | C$9.90B | 117.86 | 2.31% | 4.39% | 28.71% | -83.38% | |
49 Neutral | C$6.04B | 31.17 | 3.20% | 4.57% | 5.62% | ― | |
48 Neutral | C$5.23B | -64.60 | -1.50% | 1.63% | -9.61% | 54.17% |
* Utilities Sector Average
TSE:CPX
Capital Power
63.03
8.90
16.45%
TSE:TA
TransAlta
16.55
-0.19
-1.15%
TSE:CU
Canadian Utilities A
50.91
14.20
38.69%
TSE:AQN
Algonquin Power & Utilities
7.85
0.43
5.74%
TSE:NPI
Northland Power
20.92
-0.66
-3.06%
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.