Post by
Zipolitemexico on Jul 06, 2024 9:24am
Scotia - Sector outperform PT $52
Latest Research (June 28, 2024): OUR TAKE: Neutral. Emera announced a strategic reallocation of capital which includes: 1) a move down of the dividend growth rate (which we expected), 2) an introduction of 5%-7% EPS growth guidance (our estimates are slightly below the mid-point), and 3) an extension of its existing 7%-8% rate base growth guidance to 2029 (expected). There is no change to the existing dividend.Management reiterated that its second asset sale process remains ongoing, which we think relates to New Mexico Gas. We do not believe that today’s announcement has any read through to the status or eventual outcome of the asset sale process. Instead, we believe management and the Board considered the new dividend growth rate material enough to warrant immediate disclosure. While management previously noted that it expected having clarity on asset sales by the end of June, it is not terribly surprising that a process could take longer than expected. Our estimates do not materially move. Emera is trading at 14.1x 2025E P/E versus Fortis at 15.9x and Hydro One at 19.9x. We consider the shares to be attractively valued and believe they could react positively to an asset sale announcemen