Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - TD Cowen has reiterated its Buy rating on Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) with a price target of $40.00. According to InvestingPro data, the stock appears undervalued at its current price of $25.62, with analyst targets ranging from $27 to $48.
The firm expects HASI’s portfolio yield to gradually increase as the company continues to fund closed transactions in 2024, which amount to $2.3 billion with an average yield exceeding 10.5%. The company has $1.4 billion in liquidity available to help fund these transactions. InvestingPro data shows HASI maintains a significant 6.53% dividend yield and has raised its dividend for 6 consecutive years.
TD Cowen notes that HASI has $357 million in commercial paper with a 5.46% interest rate maturing in 2025, with reserved capacity under its credit facility. The firm models a spread of approximately 2.5% over 2024-2027, with portfolio growth driving adjusted EPS growth. The company maintains strong liquidity with a current ratio of 2.56x, indicating healthy short-term financial stability.Get deeper insights into HASI’s financial health and access exclusive analysis with a InvestingPro subscription, including 8 additional ProTips and comprehensive valuation metrics.
The analyst slightly raised the 2027 estimated adjusted EPS to $3.16, which falls within the company’s guidance range of $3.03-$3.26, citing lower interest expense as a factor. TD Cowen’s 2027 estimated dividend per share of $1.76 implies a 56% payout ratio, within HASI’s guidance of 55-60%. The company’s current diluted EPS stands at $1.59, with analysts forecasting $2.73 for fiscal year 2025.
TD Cowen expects Environmental Market Investments (EMI) to be the primary driver for EPS growth given CCH1, while noting that operating cash flow plus EMI distributions continue to fall short of covering the dividend. The company’s levered free cash flow currently stands at $52.19 million.
In other recent news, Hannon Armstrong Sustainable Infrastructure Capital Inc reported its financial results for the second quarter of 2025, which fell short of expectations. The company posted an adjusted earnings per share of $0.60, missing the forecasted $0.64, resulting in a 6.25% negative surprise. Additionally, revenue was reported at $85.69 million, below the anticipated $91.08 million. Despite these results, UBS has maintained a Buy rating on Hannon Armstrong’s stock and raised its price target to $39.00 from $38.00. The adjustment follows the earnings report and led to modest revisions in UBS’s earnings estimates for the company for the years 2025 through 2027. UBS now projects core EPS estimates of $2.66 for 2025, $2.86 for 2026, and $3.11 for 2027. These developments highlight ongoing investor interest and analyst attention toward Hannon Armstrong’s financial performance and future prospects.
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