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TransAlta Corp T.TA

Alternate Symbol(s):  TAC | T.TA.PR.E | TRNTF | T.TA.PR.D | TACPF | T.TA.PR.F | TSLTF | T.TA.PR.H | T.TA.PR.J | T.TA.PR.G

TransAlta Corporation owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia. It provides municipalities, medium and large industries, businesses and utility customers with affordable, energy-efficient and reliable power. It also produces wind power and hydro-electric power. Its segments include Hydro, Wind & Solar, Gas, Energy Transition, Energy Marketing, and Corporate. It has a diversified fleet of hydro, wind, solar, natural gas, and cogeneration generate 7,300 megawatt of electricity. It delivers renewable energy solutions for large scale commercial partners, including tech companies. It operates a fleet of electrical power generation assets, including Antrim Wind Project, Ardenville Wind Facility, Old Town Wind Project, Pinnacle Project, SunHills Solar Project, Fortescue River Gas Pipeline, and others. The Antrim Wind Project is situated on over 1,700 acres of land located in Hillsborough County, New Hampshire.


TSX:TA - Post by User

Bullboard Posts
Post by scissors14on Nov 29, 2012 9:57am
417 Views
Post# 20659373

Canaccord Has $18 Target

Canaccord Has $18 Target

INVESTOR DAY HIGHLIGHTS

OPERATING AND GROWTH

OBJECTIVES

Investment recommendation

TransAlta hosted its annual Investor Day in Toronto, outlining its

strategy and goals for 2013 and beyond. Management showed

conviction in being able to deliver on operational goals and key targets.

Should management be successful in delivering on its objectives, the

discount on the stock should decline. Key goals include delivering on

availability targets, minimizing escalation of operating and maintenance

costs, increasing the amount of longer-term contracts, particularly at

Centralia and in Alberta, meeting energy and trading gross margin

expectations and showing progress on contracted greenfield growth in

targeted regions. Notable was the company’s reduced target for Energy

Trading gross margins to $40-$60 million from $65-$85 million

previously. We continue to expect cash flow to be sufficient to provide

for maintenance capital spend as well as fully cover its dividend even

during trough power pricing periods. However, despite management’s

awareness of the importance of maintaining it, the level of the dividend

is ultimately a Board decision. We are maintaining our BUY rating and

C$18.00 target price on the stock.

Valuation

Our target price is based on a discounted cash flow analysis as well as

dividend discount models and a multiples approach on earnings and

cash flow relative to both historical valuations and power and pipeline

peers. Note that our valuation assumes the current level of the dividend

is maintained. While we have an C$18.00 target price, we see the value

of the stock in excess of that level on a discounted cash flow analysis;

however, until the company wins back investor confidence and

convinces the market that the dividend level is safe, the stock is unlikely

to reach its intrinsic value. Should the shares continue to languish at

current low levels, we believe there is an increased potential that

TransAlta becomes an acquisition target.

Bullboard Posts