RE:CIBC lowers price target for BLX from $48 to $42There are many psychology experiments that demonstrate a number, regardless of its accuracy, acts as an anchor. So take price targets with a grain of salt. BLX may seem undervalued compared to the share price level it reached in January 2021 fueled by the the ESG mania and Biden green agenda. Those days are gone. In the land of the here and now the landscape has changed.
I posted on this board on October 18 that I was looking to get back in but I didn't like the 5 year plan but would reconsider if the share price dropped to below $30.
I think it will still get there. The 5 year plan shows a doubling of generation capacity and no dividend increases through to 2025. My concern is the competition for wind and solar projects. Every power company now wants to improve its green credentials which will result in very competitive bids for projects. A large utility will acceptable a much lower rate of return just to get the project. The under performance of that project will not a large impact on overall results. When it comes to solar deserts ( I refuse to call them farms) and onshore wind sites, the technological moat is not very wide.
Further proof that the alternative energy field is changing, consider that TA now has no coal generation and once semi-green AQN now has coal generation, which is why I dumped them after the Kentucky acquisition. Crazy world!
So my decision on BLX is that it will see $30 before it sees $42. If I'm wrong, no big deal. The money will go somewhere else. GLTA
Vega1357 wrote: I posted earlier that there was no change in the price target by CIBC, as it wasn't reported by the Globe and Mail earlier. However, I've since learned that CIBC has lowered their price target to $42, This represents a 36% potential share price appreciation.