National Bank of Canada Cuts AQN Price Target After Update2023-01-13 08:22:52 AM ET (MT Newswires)
08:22 AM EST, 01/13/2023 (MT Newswires) -- National Bank of Canada on Friday lowered Algonquin Power & Utilities Corp. (AQN.TO)'s price target to US$11.00 from US$12.00 with a sector perform rating following the company's investor update.
The update included a 40% dividend cut, suspension of its dividend reinvestment plan and $1 billion in sell-downs.
The company also set a 2023 EPS guidance range of $0.55 to $0.61, down 9% to 18% year over year compared to the bank's 2022 EPS estimates largely on higher financing costs.
National Bank said higher tax rates, interest rates and lower income linked to the hypothetical liquidation at book value should be headwinds to EPS growth, while tailwinds could include rate-case increases and benefits from tax credits for renewables.
"We believe investors may still want more details on the pricing and timing of asset sell-downs and the Kentucky Power (KP) deal. AQN appears committed to getting the KP deal done, though that could change by the end of April," National Bank said.