Brookfield Renewable Partners Non Voting Units T.BEP.PR.R

TD

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This is a US$ target. GLTA

Brookfield Renewable Partners L.P.

(BEP-N, BEP.UN-T) US$32.80 | C$41.82

Q4 Results Near Expectations; Organic Growth Platform Expanding

Event

Brookfield Renewable Partners L.P. (BEP) reported Q4/21 results on February 4 before the market opened. Q4/21 FFO/unit of $0.33 matched both our estimate and the consensus forecast. Proportionate EBITDA of $431 million was slightly below both our forecast of $438 million and the consensus forecast of $445 million.

Impact: NEUTRAL

• Q4/21 results were consistent with expectations. Overall Q4/21 proportionate generation was 8% below Q4 LTA guidance. Higher implied price realizations (including some non-recurring discrete items within the wind and solar segments) mitigated below-normal generation and lower-than-forecast operating margins.

• BEP's development pipeline now totals 62 GW (up 72% q/q). This increase mostly reflects the recent acquisition of U.S. developer Urban Grid (20 GW gross pipeline). BEP anticipates levered returns in the high teens from this pipeline, before additional upside that could come from potential capital recycling in the future. Although the company's growth focus remains on M&A, we believe that optimism regarding BEP's growing development pipeline was the primary driver of Friday's share-price increase.

• BEP's available liquidity was $4.1 billion at the end of Q4/21. The 40-year PPA signed for the Lievre hydro assets provided the company with C$1 billion of additional capital from an asset-level up-financing. BEP targets annual equity investment of $1.0 billion-$1.2 billion over the next five years. Management believes that industry growth ambitions, coupled with recent sector share-price declines, could drive an increase in the potential for acquisitions of operating assets.

• We reiterate our BUY recommendation and $41.00 target price. Revisions to our estimates primarily reflect reconciliation of the Q4/21 results.

  TD Investment Conclusion

  We believe that BEP deserves a valuation premium based on several factors: scale/ track record; broad investment opportunity-set; consistent value-accretive initiatives; ability to act on large/complex transactions; operating/procurement expertise; management depth; and a strong funding platform. We believe that BEP is well- positioned for further growth tied to decarbonization and electrification trends