GLTALongs. Yesterdays News.... moving right direction 11:03 AM EST, 12/15/2021 (MT Newswires) -- Algonquin Power & Utilities (AQN) raising its five-year capital plan was a positive move, but its 2022 and five-year earnings per share outlook were "disappointing," RBC Capital Markets said in a note Wednesday.
"Some pressure could be alleviated if management executes on their plan to divest assets in 2022," RBC analysts said.
The Canadian renewable energy and utility conglomerate raised its five-year capital budget to $12.4 billion from $9.4 billion at its Investor Day. The budget, $3.4 billion of which was already used in the first nine months of the year, includes the pending Kentucky Power acquisition.
RBC analysts said Algonquin Power's 2022 EPS guidance range of $0.72 to $0.77 is below their expectations due to lower results from the grid congestion in Southern Texas, among other factors. Given the increase in the capital plan, however, they believe the company may have been able to maintain the 8% to 10% compound annual growth rate outlook for EPS.
RBC reiterated its outperform rating on the stock, with a price target of $18.
Shares in the company were more than 1% lower in recent morning trading.
Price: 13.52, Change: -0.14, Percent Change: -1.06