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Tuesday, TransAlta (NYSE:TAC) Corporation (TA:CN) (NYSE: TAC), currently trading at $9.35 with a market capitalization of $2.78 billion, maintained its positive outlook from BMO Capital Markets, as analysts reiterated their Outperform rating and Top Pick designation for the energy company. The firm’s price target for TransAlta remains at Cdn$22.00. BMO’s analysts highlighted the company’s favorable position in the data center market and the potential for significant growth in Alberta’s energy consumption. According to InvestingPro analysis, TransAlta maintains a "GOOD" financial health score, suggesting strong fundamentals supporting its growth initiatives.
TransAlta is optimistic about the growth opportunities within the data center sector, with projections indicating that Alberta could require an additional 1-2 gigawatts (GW) of power by the 2027-2028 period. BMO Capital sees this as a substantial opportunity for TransAlta, suggesting a considerable upside to their Cdn$22.00 price target for the company’s shares. The company’s strong market position is further reinforced by its impressive 48.68% return over the past year and a 38-year track record of consistent dividend payments.
In a report published on January 24, 2025, BMO Capital had previously noted that TransAlta’s target price could climb to at least Cdn$30.00 if the company secures a deal for approximately 1GW of co-located data center capacity with contract prices ranging between $80 and $100 per megawatt-hour (MWh). The analysts believe that an increase in power prices in Alberta would further benefit TransAlta, given its uncontracted power fleet in the region and the overall need for new power generation, which the company is poised to supply.
The firm’s continued endorsement of TransAlta as a Top Pick reflects confidence in the company’s strategic position and the potential for growth in the Alberta power market. BMO Capital’s stance remains firm on the Outperform rating and the Cdn$22.00 target price for TransAlta’s stock, emphasizing the upside potential tied to the company’s initiatives and market dynamics.
In other recent news, TransAlta Corporation has reported strong financial results for the year 2024, leading to an increase in its dividend payments. This announcement was made through a Form 6-K filing with the U.S. Securities and Exchange Commission. While specific figures were not disclosed, the decision to raise the dividend reflects the company’s confidence in its financial health and commitment to shareholder value. Additionally, TransAlta has adopted an Automatic Share Purchase Plan (ASPP) to facilitate share repurchases during blackout periods, aligning with its strategy to enhance shareholder value. The ASPP allows TransAlta’s broker to acquire common shares on behalf of the company in accordance with pre-established criteria. Furthermore, TransAlta has scheduled a conference call to discuss its fourth quarter and full-year 2024 financial results, with details to be announced later. The company has also provided guidance for 2025, outlining its expectations for future performance, though specific projections were not detailed. These developments underscore TransAlta’s proactive approach to capital management and its adherence to transparent market practices.
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