TSX:ALA - Post Discussion
Post by
morzine on Jan 23, 2023 12:06pm
Scotia Capital - new target
Seeing “strong and visible growth,” Scotia Capital analyst Robert Hope raised his target prices for a group of utility stocks in his coverage universe on Monday after introducing his 2025 financial projections.
“We believe this group’s highly visible and resilient growth profile could be attractive to investors longer-term as well as during periods of market uncertainty as we are experiencing now,” he said. “
“For the utility group, we see an average 2023-2025 estimated EPS CAGR [earnings per share compound annual growth rate] of 6 per cent, which is in-line with our three-year outlook from last year. However, given the numerous tailwinds for the group, we believe there is an upward bias to our estimates. Overall, our favourite utility names are AltaGas and Emera.”
Analyst: “AltaGas remains our favourite utility stock. It should not only benefit from an above average rate base growth outlook (8-10-per-cent CAGR out to 2027) but also low capital, higher return midstream projects. At this point, we are not including meaningful midstream expansion projects in our estimates and valuation, which provides an avenue of upside. Even still, we see AltaGas as having the strongest growth profile of the utilities. Clarity on midstream margins in 2023 could be a catalyst for the shares in addition to progress on the Mountain Valley Pipeline and asset sales.”
Target to $31 from $30 .
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