RE:UpgradeMore details. GLTA
“For the quarter to date, Boralex Inc. (BLX) delivered weak performance with a negative 9-per-cent return that compared to the Canadian renewable peer group average of 1.3 per cent over that timeframe according to Refinitiv data,” he said. “Even on the year-to-date, BLX achieved a negative 5 per cent versus a flat peer performance. A combination of poor stock performance and, generally, upwardly biased forecasts on re-visited financials creates an interesting risk-reward ... In this context, we upgrade BLX to Outperform from the prior Neutral rating. Largely to the possible future benefit of BLX, we believe more growth potential in the core Qubec market may be an underappreciated aspect of the company’s evolution and expansion prospects.
“Given the company’s size, individual project wins can translate into a significant valuation impact, in our view. The team’s positioning, duration and credibility combined with an overall favourable backdrop for many renewable developers should collectively be supportive of value creation potential. We have long regarded BLX as a very high-quality name that typically trades at a premia. That reality remains intact, in our view; however, the current market pricing looks to provide an interesting opportunity for excess return potential.”
Mr. Kuske increased his target for Boralex shares to $50 from $45, above the $46.88 average on the Street.
“Boralex’s growth plan of 4.4GW capacity by 2025 and 10GW-12GW by 2030 is reasonable - albeit ambitiously executable. The ability to deliver this growth and finance the plan along are key to the direction of the share price,” he added.