The Globe and Mail reports in its Friday, July 7, edition that iA Capital Markets analyst Naji Baydoun continues to rate Algonquin Power & Utilities "speculative buy," with a $13 share target (all figures Canadian unless otherwise stated). The Globe's David Leeder writes that analysts on average target the shares at $9.48 (U.S.). Mr. Baydoun says in a note: "Although a sale of Algonquin's water utilities could be completed at a premium to current valuations (we calculate $2 to $4 per share of value at 30 times P/E or 2.25 times rate base), this would likely dilute the company's remaining portfolio quality, growth profile, and valuation. As for 2025 run-rate EPS expectations, we believe that 75 cent to 95 cents is optimistic and would likely require substantial share buybacks to achieve; large share repurchases would likely limit Algonquin's ability to invest in organic growth, and we estimate that about 60 cents to 65 cents of annual run-rate earnings per share by 2025 is more realistic (with some upside from buybacks). Overall, we continue to see activist shareholder involvement in Algonquin leading to the pursuit/execution of strategic initiatives to unlock shareholder value in the near term."
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