RE:RE:RBC Capital Markets Outlines Expectations for Upcoming CallCapharnaum wrote: davgro wrote: 2023-01-10 10:22:19 AM ET (MT Newswires)
10:22 AM EST, 01/10/2023 (MT Newswires) -- RBC Capital Markets said Monday that it expects Algonquin Power & Utilities Corp. (AQN.TO) to outline its 2023 EPS guidance in its investor update call on Thursday.
RBC estimated Algonquin's 2023 EPS at .67 compared to the consensus forecast of .70.
RBC said the event is highly anticipated after management cut its 2022 EPS guidance and pulled its longer-term outlook in November 2022.
Investors are also expected to look for more clarity on the pending $2.6 billion acquisition of Kentucky Power, RBC said.
Algonquin's dividend, capital and funding plan, potential asset sales and balance sheet are also key topics for investors, according to RBC.
"Due to the level of uncertainty with respect to the pending KP acquisition and potential asset sales, management's 5-year outlook may lack details," RBC said.
RBC gave Algonquin a sector perform rating with a US$8.00 price target.
I think their 2023 EPS is too high and doesn't match their price target. At .67 and a 15x PE (lower than average for utilities), you'd have a $10 USD stock.
I believe 2023 EPS will be closer to .55 and then back to .70+ in 2024.
Looks like I was closer than the analysts for the 2023 EPS...
However, after the presentation, and considering the tax impact, they may not be back to $0.70+ in 2024.
Based on a $0.55 EPS for 2023 (USD), the stock is currently trading around 12.5x earnings, which is extremely low for a utility. At 15x earnings, share price would be around $11 CAD.
I would have liked to see an estimate for EPS that would be longer than 2023 or better cashflow projections.
At least they have stopped the dilution by slashing the DRIP while the stock is trading at current industry low multiples.