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On Thursday, Jefferies analyst Julian Dumoulin-Smith updated the firm’s outlook on XPLR Infrastructure (NYSE:XIFR), raising the price target to $13.00 from the previous $12.00 and maintaining a Buy rating on the stock. According to InvestingPro data, analyst targets for XIFR range from $7 to $22, with the stock currently trading at $9.53. The adjustment reflects a series of factors including recent financial maneuvers and market trends.
Dumoulin-Smith’s analysis took into account the company’s latest $1.75 billion holding company debt raise and revised Power Purchase Agreement (PPA) prices based on 2024 EQR filings. InvestingPro reveals that XIFR maintains a significant dividend yield of 38.5% and has raised its dividend for 11 consecutive years, despite current financial pressures. These developments led to a downward revision of the expected cash available for distribution (CAFD) for 2025 and 2026 by approximately 8-10%, and a 5-7% decrease in forecasted free cash flow before growth (FCFbg).
Despite these reductions, the analyst updated the recontracting assumptions for the outer years to align with current market PPA trends. This update, along with the expectation of long-term PPA price increases, contributed to the increased price target. However, the positive outlook was somewhat tempered by the anticipation of higher near-term coupon pressures.
The new price target of $13.00 represents a slight increase from the previous target and is based on the balance of these factors. The Buy rating suggests that Jefferies continues to see value in XPLR Infrastructure’s stock, despite the revised financial forecasts.
XPLR Infrastructure’s recent financial activities and the updated market data have been significant in shaping the firm’s outlook. As the market for PPAs evolves, the company’s financial performance and stock valuation will likely continue to be influenced by these and other industry trends.
In other recent news, XPLR Infrastructure reported its fourth-quarter 2024 earnings, revealing a significant shortfall in earnings per share (EPS), which came in at -$1.08 compared to the expected $0.71. Despite this, the company slightly exceeded revenue forecasts with $294 million against an anticipated $288.59 million. XPLR Infrastructure also announced a $1.4 billion private offering of senior unsecured notes, intended to support various corporate purposes, including the repayment of existing debt and potential clean energy investments. Jefferies analyst Julian Dumoulin-Smith downgraded the price target for XPLR Infrastructure from $15.00 to $12.00, while maintaining a Buy rating, citing increased interest expenses affecting future cash flow estimates. Additionally, the company disclosed leadership changes, with Rebecca Kujawa retiring from the Board and James M. May stepping down as Controller, to be replaced by William J. Gough. The company has also appointed Michael H. Dunne to the Board. These developments reflect XPLR Infrastructure’s ongoing efforts to navigate its financial challenges and strategic direction in the renewable energy sector.
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