Bullboard - Stock Discussion Forum Brookfield Renewable Partners Non Voting Units T.BEP.UN

Primary Symbol: BEP Alternate Symbol(s): T.BEP.PR.R | BRENF | T.BEP.PR.G | T.BEP.PR.M

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Brookfield Renewable Partners L.P. is a Bermuda-based globally diversified, multi-technology, owner and operator of clean energy and sustainable solutions assets. The Company’s segments include hydroelectric, wind, utility-scale solar and distributed energy, and storage, which includes distributed generation and pumped storage, sustainable solutions, and corporate. Its sustainable solutions... see more

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Brookfield Renewable Partners Non Voting Units > TD Upgrade

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Post by retiredcf on Sep 30, 2022 8:22am

TD Upgrade

These are USD targets. GLTA

Brookfield Renewable Partners L.P.

(BEP-N, BEP.UN-T) US$30.94 | C$42.24

Higher Equity Deployment Target; Upgrading After Valuation Slump

Event

Yesterday, Brookfield Renewable Partners (BEP) hosted investors and analysts for management presentations. Management increased BEP's five-year annual equity deployment target to a range of $1.2 billion-$1.4 billion (at the midpoint, +18% versus last year) and articulated a growth plan that is tilting towards organic development.

Impact: NEUTRAL

Presentations provided useful context around the company's investment focus and funding plan. The overall theme was consistent with recent direction.
We believe that management's equity deployment target is conservative. BEP's annual equity investment target over the next five years is $1.2 billion-$1.4 billion (up 16-20% from last year's guidance, commensurate with the increase in BEP's scale). As 2022 year-to-date investment has already surpassed the top end of this revised range, we believe management is taking a cautious approach. With $3.9 billion of available liquidity at the end of Q2/22, BEP is well-funded.
Growth plans are shifting to organic development at the margin. BEP has a 96.9 GW development pipeline (>3x larger than a year ago), of which 11.8 GW is scheduled for commissioning over the next three years. Two U.S. acquisitions announced yesterday augment this pipeline. BEP expects to grow normalized FFO/unit at a 10%+ CAGR over the next five years before prospective M&A.
We are upgrading BEP to ACTION LIST BUY from Buy, reflecting recent relative share-price/valuation weakness. The lower target price ($41.00 versus $46.00 previously) reflects more conservative NAV parameters as BEP is exposed to interest-rate pressure for its organic development pipeline. In our view, investors underestimate BEP's earnings resiliency in a recession environment.

TD Investment Conclusion

We believe that BEP deserves a valuation premium based on several factors: scale; broad investment opportunity-set; consistent value-accretive track record; ability to act on large/complex transactions; operating/procurement expertise; management depth; and a strong funding platform. BEP's unit price has declined 26% since the late-Q1/22 peak, lagging most peers and narrowing BEP's valuation premium.