Scotia analyst’s top picks in the yield-heavy energy infrastructure sector
Scotiabank analyst Robert Hope recapped the earnings reports from the yield-heavy energy infrastructure sector and provided top picks,
“Overall, Q1 saw significantly higher volatility in results than usual with some sizable beats (TA, KEY, ALA) and misses (INE, NPI, RNW). This drove some large share price reactions with BEP, KEY, and ALA seeing sizable gains, while NPI, INE, and AQN saw weakness. Following the quarter, there was a slight bias higher in consensus estimates, with TA and KEY having the largest positive revisions for 2023. We continue to see the market focused on funding plans and leverage, and any positive news on these fronts could drive further outperformance.
“With continued natural gas and NGL [natural gas liquids] volume growth, our favourite sub-sector is the midstream group. The renewable group looks attractive to us on a valuation basis, but it is unclear what improves sentiment. Our overall favourite names are ALA, KEY, BLX, NPI, and TA.”