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Investor Insights

This summary was created by AI, based on 10 opinions in the last 12 months.

Experts have mixed opinions on Transalta Corp (TA-T) with some highlighting its potential for future growth, while others express concerns over its leveraged balance sheet and past dividend cuts. The company operates as a renewable energy producer with a focus on wind and solar generation. While some experts believe it is undervalued and a good long-term investment, others are skeptical about its high debt levels and declining sales and EBITDA. Overall, there is uncertainty surrounding the stock's future performance.

Consensus
Mixed
Valuation
Fair Value
DON'T BUY
Transalta Corp
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

At current levels we would consider TA 'OK'. But, it has not created much long term value, and has had to cut its dividend in the past. We would far prefer BEPC or H and would be comfortable swapping. 
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electrical / electronic
premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Transalta Corp
Stockchase Research Editor: Michael O'Reilly

The Alberta based utility operates over 2,000 MW of wind and solar generation spread between Canada and the US.  It trades at 18x earnings and supports a 30% ROE.  Cash reserves are growing while shares are bought back, but they do continue to add to debt.  Its dividend is backed by a payout ratio under 15% of cash flow.  We recommend placing a stop-loss at $8.50, looking to achieve $15.00 -- upside potential of 50%.  Yield 2.2%

(Analysts’ price target is $15.28)
electrical / electronic
BUY
Transalta Corp

TransAlta renewables better business. Current valuation is cheap. Expecting higher share price. Dividend not as high as peers. Good stock to own going forward. 

electrical / electronic
DON'T BUY
Transalta Corp

On the surface, it looks like they will generate a lot of free cash flow per share, but their debt is huge and they plan to spend around $3.5 billion through 2028. Can they increase their dividend? What if interest rates go up a lot in coming years?  The dividend, though just increased, remains low. The PE is not cheap enough.

electrical / electronic
PAST TOP PICK
Transalta Corp
(A Top Pick Sep 12/22, Up 7%)

Excellent performance the past year given tough year with rising interest rates.
Current share price undervalued - should be $15 or $16.
Strong business that will continue to own shares in.
Renewable business roll-up not a concern.

electrical / electronic
SELL
Transalta Corp

Does not own shares in company.
Lower yield (~1%) than renewable side of business.
Would prefer other income generating stocks.

electrical / electronic
HOLD
Transalta Corp

RNW is a yield proxy, and those have fallen, with decent yield and nice EPS growth. Parent company is taking it over, pending approval. The real question is what do you do with TA? Transaction looks slightly dilutive. Long term, bigger flow in a simplified structure, which could lead to a higher valuation. 

Backdrop for TA is really supportive, solid balance sheet, compelling free cashflow yield of 15%. Could be synergies. He likes TA post-closing.

electrical / electronic
PAST TOP PICK
Transalta Corp
(A Top Pick Jun 16/22, Down 14%)

Complicated organizational structure. Over-indexed to merchant power generation, which is unregulated. A series of misses on quarterly earnings. Pruned it out of the momentum portfolio when it wasn't performing. 

electrical / electronic
DON'T BUY
Transalta Corp
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

A operates as a renewable energy producer, and is now trading at 19x times' Forward P/E. 
In the last five years, sales grew around 5% on average. 
The balance sheet is quite leveraged, with net debt of $3.3B.
Total debt is around 3.8x times trailing twelve-month cash flow of $900M, and cash flow declined around -11% compared to $1.0B last year. 
Based on consensus estimates, sales are expected to decline by -15% in 2023.
As sales and EBITDA are expected to decline in the next few years, TA is trading at quite a premium multiple to peers, we think there are better opportunities in the market such as ENB, BEP.UN. 
TA has also in the past had to cut its dividend, which we never like when considering an income stock. 
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electrical / electronic
DON'T BUY
Transalta Corp

Its BV has fallen from $14 per share to $2 per share. The P/E is 28.6 and the yield only 1.8% which is low for utilities. This is because they are using money for buying back stock which should be paid out to shareholders. He doesn't give management much credit. As a rule he feels that buybacks may do a good job but the BV per share goes down over the years. Editor's Note - there was some discussion on this, to be continued later.

electrical / electronic
DON'T BUY
Transalta Corp
3x book value. It got there by buying back stock, thereby trashing its balance sheet. By paying out equity, they've raised ROE and pushed up price to book. It's a technical move, as opposed to positive fundamentals.
electrical / electronic
BUY
Transalta Corp
TA is way cheaper than RNW and has more upside. But he likes both.
electrical / electronic
TOP PICK
Transalta Corp
It is reducing its coal plants and growing its renewables. It made a good deal with Brookfield a few years ago which has two experienced members on the Board as well as a significant equity stake. It had a bit of a soft quarter but looking to improve. A low risk stock with 10 to 15 % growth and a dividend. Buy 9, Hold 3, Sell 0 (Analysts’ price target is $16.34)
electrical / electronic
TOP PICK
Transalta Corp
Mainly in Alberta. Pivoting away from coal, towards renewables. 50% valuation discount to pure play renewable power generators. Defensive like a utility, but backdoor play on strength in the oil patch. Bought it for the income, as well as potential capital appreciation. Breaking out on the charts. Yield is 1.40%. (Analysts’ price target is $16.45)
electrical / electronic
DON'T BUY
Transalta Corp
He prefers Canadian Utilities, because it's better managed with fewer legacy problems. TA has disappointed investors in the past.
electrical / electronic
Showing 1 to 15 of 596 entries

Transalta Corp(TA-T) Rating

Ranking : 3 out of 5

Bullish - Buy Signals / Votes : 3

Neutral - Hold Signals / Votes : 1

Bearish - Sell Signals / Votes : 5

Total Signals / Votes : 9

Stockchase rating for Transalta Corp is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Transalta Corp(TA-T) Frequently Asked Questions

What is Transalta Corp stock symbol?

Transalta Corp is a Canadian stock, trading under the symbol TA-T on the Toronto Stock Exchange (TA-CT). It is usually referred to as TSX:TA or TA-T

Is Transalta Corp a buy or a sell?

In the last year, 9 stock analysts published opinions about TA-T. 3 analysts recommended to BUY the stock. 5 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Transalta Corp.

Is Transalta Corp a good investment or a top pick?

Transalta Corp was recommended as a Top Pick by on . Read the latest stock experts ratings for Transalta Corp.

Why is Transalta Corp stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Transalta Corp worth watching?

9 stock analysts on Stockchase covered Transalta Corp In the last year. It is a trending stock that is worth watching.

What is Transalta Corp stock price?

On 2024-02-26, Transalta Corp (TA-T) stock closed at a price of $9.56.