From the Globe & MailA series of equity analysts on the Street cut their targets for shares of AltaGas Ltd. following Friday’s third-quarter earnings release, which brought a 2.5-per-cent share price decline. Those making changes include:
* Scotia Capital’s Robert Hope to $30 from $31 with a “sector outperform” rating. The average is $32.20.
“AltaGas’s Q3/22 EPS was a penny ahead of our estimate, though Global Export margins were well below our expectations,” said Mr. Hope. “We move down our margin assumption, which is a 1-2-per-cent headwind to our 2023/2024 EPS estimates and reduces our target price by $1 to $30. That said, the core reasons we like AltaGas are unchanged and include: 1) strong utility growth, 2) significant de-levering in 2023, 3) low capital, high return Midstream growth opportunities, and 4) attractive valuation.”=
* BMO Nesbitt Burns’ Ben Pham to $36 from $37 with an “outperform” rating.
“While third-quarter results fell short, key here is that management remains confident delivering to 2022 guidance, particularly noting that inflationary pressures on LPG logistics costs have eased, while USD F/X translation is emerging as a modest tailwind,” said Mr. Pham. “Also, Utility had a record quarter with 2022 Utility rate base growth expected in the high single digits. Combined with the 48-per-cent potential total return to our new $36 target price (vs. $37) and attractive valuation (approximately 28-per-cent P/E discount), we are maintaining our Outperform rating and would continue accumulating.”
* Canaccord Genuity’s John Bereznicki to $31 from $32 with a “buy” rating.
* RBC’s Robert Kwan to $30 from $34 with an “outperform” rating.