U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
On Monday, RBC Capital Markets adjusted its outlook on Algonquin Power & Utilities Corp. (NYSE: AQN), increasing the price target to $6.00 from the previous $5.50, while maintaining a Sector Perform rating on the shares. The revision follows Algonquin’s first-quarter results for 2025, which showed solid performance with core earnings surpassing consensus estimates, excluding one-time items.
Nelson Ng of RBC Capital noted the company’s transition under new leadership, stating, "Turning the corner as a pure-play utility; Algonquin posted solid Q1/25 results, with core earnings (excluding one-time items) coming in slightly above consensus estimates." The analyst believes the stock is fairly valued at present but anticipates further details to be revealed at the investor update scheduled for June 3, which will provide more clarity on the company’s direction for the 2025-27 period. InvestingPro analysis shows the company maintains strong fundamentals with a current ratio of 1.16, though it operates with a significant debt burden. Notably, the company has maintained dividend payments for 28 consecutive years, currently yielding 4.34%.
The price target increase reflects a more positive investor sentiment towards Algonquin Power & Utilities as it embarks on a new chapter with Rod West at the helm as CEO. Under his leadership, the company is expected to focus on its core utilities business.
Investors and market watchers are now looking towards the June 3 investor update for additional information on the company’s strategic plans and performance expectations over the next couple of years. This anticipation comes as Algonquin Power & Utilities continues to navigate the utility sector, with the market closely monitoring its progress and adjusting expectations accordingly.
The stock’s valuation and future prospects are likely to be influenced by the upcoming investor update, which could provide significant insights into the company’s long-term strategy and operational focus under the new CEO’s guidance.
In other recent news, Algonquin Power & Utilities Corp reported its Q1 2025 earnings, surpassing market expectations with an earnings per share (EPS) of $0.14, significantly higher than the forecasted $0.09. The company also achieved a 39% year-over-year increase in adjusted net earnings from continuing operations, totaling $111.6 million. These results were driven by new rates and reduced interest expenses. Algonquin Power is also investing heavily in transmission infrastructure upgrades, which could have long-term implications for its operations. Meanwhile, the company is considering a potential divestiture of its hydro portfolio, which could impact future earnings and strategic direction. Additionally, the firm is dealing with regulatory proceedings in multiple states, which may affect future operations and profitability. The company plans to provide adjusted net EPS ranges for 2025-2027 in an investor update call scheduled for June 3, 2024. Algonquin Power’s CEO emphasized the company’s commitment to operational discipline and cost management, aiming to position it as a "premium utility" in the market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.