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On Tuesday, Jefferies updated its outlook on Hannon Armstrong (NYSE:HASI), a sustainable infrastructure company, by increasing the price target to $40.00 from the previous $39.00. The firm maintains a Buy rating on the stock. The revision follows Hannon Armstrong's impressive performance in the first half of 2024, during which the company reported over 20% year-over-year adjusted EPS growth.
The company's strong financial results in the earlier part of the year have set a solid foundation for achieving its full-year adjusted EPS growth targets. Jefferies anticipates that the upcoming quarter will continue to reflect Hannon Armstrong's robust execution on portfolio originations. The focus for investors and analysts will likely be on the incremental yields and how they are affected by the current market conditions.
The analyst from Jefferies noted that despite the challenging interest rate environment, there is potential for Hannon Armstrong to experience an expansion in spreads. This would be attributed to higher project yields and the company's effective management of its cost of capital. The company's adept handling of financial strategies amidst fluctuating interest rates has been a key factor in its strong performance.
Hannon Armstrong's ability to navigate the financial landscape and deliver solid growth amidst economic challenges has garnered continued support from Jefferies. The firm's maintained Buy rating and increased price target reflect confidence in the company's strategic execution and future prospects.
In other recent news, Hannon Armstrong Sustainable Infrastructure Capital, or HA Sustainable Infrastructure Capital, announced strong second-quarter results for 2024, with a 19% year-over-year growth in adjusted earnings per share (EPS) and a 16% increase in adjusted net investment income.
The company confirmed its guidance for an 8-10% growth in adjusted EPS from 2024 to 2026. In addition, Baird increased its price target on shares of Hannon Armstrong to $47.00, maintaining an Outperform rating and expressing confidence in the company's potential for continued success.
The company also expanded its credit facility, enhancing its capital structure. Analysts from Jefferies and RBC Capital initiated coverage on the company with a Buy and Outperform rating respectively, citing the company's potential for compounding growth and resilient business model.
Hannon Armstrong's strategic partnership with KKR in their CCH1 $2 billion initiative and an increase in its investments in renewable energy, reaching 10 gigawatts in solar and wind capacity, and 6 million MMBTUs in renewable natural gas projects, were also notable recent developments. As a result, the company's managed assets have seen a significant increase of over 80% since 2020, reaching $13 billion by the end of Q2 2024.
InvestingPro Insights
Hannon Armstrong's (NYSE:HASI) strong performance highlighted by Jefferies is further supported by data from InvestingPro. The company's market cap stands at $4.12 billion, with a P/E ratio of 15.04, indicating a relatively attractive valuation considering its growth prospects.
InvestingPro Tips reveal that HASI has maintained dividend payments for 12 consecutive years and has raised its dividend for 5 consecutive years, demonstrating a commitment to shareholder returns. This aligns with the company's solid financial performance noted in the article.
The stock's price movements have been quite volatile, but HASI has shown a high return over the last year, with a remarkable 126.19% price total return. This performance underscores the market's positive reception of the company's growth strategy and execution.
Investors should note that HASI is trading near its 52-week high, with the current price at 96.85% of its 52-week peak. This suggests strong momentum, which correlates with the analyst's positive outlook and increased price target.
For those seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Hannon Armstrong, providing deeper insights into the company's financial health and market position.
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