Northland Power Inc T.NPI.PR.B

Revised price target

[BayWall]

The Globe and Mail reports in its Friday, June 7, edition that Desjardins Securities analyst Brent Stadler reduced discount rates for independent power producers by 50 basis points in response to the Bank of Canada's interest rate cut on Wednesday, which prompted him to boost his share target for Northland Power to $29 from $27. The Globe's David Leeder writes that Mr. Stadler continues to rate Northland Power "buy." Analysts on average target the shares at $29.83. Mr. Stadler says in a note: "Our discount rate reduction reflects the BOC rate cut (25 basis points), improved investor sentiment and expectations of one additional cut this year. We are still of the view that IPPs that have increased return hurdles to reflect the current environment and that have been able to sign PPAs or deploy capital at these returns have been investing in very attractive projects, which should become even more accretive to NAV if rates continue to move lower. We maintain our pecking order (Boralex, Capital Power and Innergex Renewable Energy) and our positive sector outlook." The Globe reported on April 19 that CIBC World Markets had reaffirmed its "outperformer" recommendation for Northland Power, which was then worth $20.74.

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