$16.50 Price Target for RNW TATB Capital Markets analyst Nate Heywood:
Adds TransAlta Renewables Inc. (RNW-T) with a “sector perform” rating and $16.50 target. Average: $16.
“With deep roots in renewable power generation, TransAlta Renewables (RNW) houses an intriguing investment profile through projected asset growth (2019-2022 EBITDA CAGR of 4 per cent), conservative leverage (2020 estimated net debt to EBITDA of 1.7 times), and an attractive dividend yield (6.5 per cent),” he said. “The Company is a subsidiary of TransAlta Corporation (TA-T), where TA owns, directly or indirectly, 60 per cent of RNW. The Company is built on a platform of highly diversified assets, with significant geographic reach, and a highly contracted cash flow profile. The focus for growth continues to be in its current operating regions, Canada, the U.S., and Australia, where renewable and natural gas facilities are poised for growth. RNW has historically returned high levels of capital to its shareholders, as cash available for distribution has grown rapidly through asset investments, supporting a 6.5-per-cent dividend yield.”