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Investing.com - Scotiabank (TSX:BNS) upgraded TransAlta (TSX:TA) (NYSE:TAC) stock rating from Sector Perform to Sector Outperform on Friday, while raising its price target to C$20.00 from C$16.00.
The Canadian utility company’s shares have declined 20% year-to-date, making it the weakest performer in Scotiabank’s coverage universe and significantly underperforming both Canadian and U.S. power sector peers.
Scotiabank noted that TransAlta shares have gained momentum in the second quarter of 2025, a trend it expects to continue due to potential positive catalysts related to Alberta data centers in the second half of the year.
The bank highlighted ongoing developments in the Alberta data center process that should benefit TransAlta’s assets, specifically mentioning that five parties initially received allocations of the excess 1,200 MW of capacity in the province.
These parties can now trade their allocations, which Scotiabank views favorably as it "should allow market forces to better shape the outcome and focus on the most advanced options."
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