TransAlta Upgraded to Outperform, Stock Rises 6.5%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy TAC?
Source: seekingalpha
- Rating Upgrade: National Bank Financial upgraded TransAlta (TAC) from Sector Perform to Outperform with a C$22 price target, anticipating several catalysts that could drive the stock higher.
- Project Value Reevaluation: The analyst noted that the recent 22% pullback in TAC's stock no longer reflects the value of its upcoming US$600M Keephills data center project and Centralia gas conversion, with Alberta power prices expected to recover to the mid-C$70s to mid-C$80s per MWh range.
- EBITDA Growth Outlook: At its investor day, TransAlta outlined a path to double-digit EBITDA growth through 2029, supported by an expected Alberta net load growth of 900-1,300 MW, which could push pool prices to $85-$120/MWh and drive EBITDA to $1.35B-$1.8B.
- Enhanced Financial Flexibility: The anticipated increase in free cash flow and growing debt capacity should further support TransAlta's financial flexibility to pursue a diverse mix of greenfield, brownfield, and accretive M&A opportunities, enhancing its competitive position in the market.
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Analyst Views on TAC
Wall Street analysts forecast TAC stock price to rise
7 Analyst Rating
5 Buy
2 Hold
0 Sell
Moderate Buy
Current: 12.710
Low
12.96
Averages
17.38
High
19.44
Current: 12.710
Low
12.96
Averages
17.38
High
19.44
About TAC
TransAlta Corporation owns, operates, and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia. It provides municipalities, medium and large industries, businesses, and utility customers with affordable, energy-efficient, and reliable power. Its portfolio includes hydro, wind, solar, battery storage, natural gas, and thermal power. Its segments include Hydro, Wind & Solar, Gas, Energy Transition, Energy Marketing, and Corporate. It has over 88 energy assets in the portfolio. It has a diversified fleet of hydro, wind, solar, natural gas, and cogeneration generates over 9,000 megawatts of electricity. It delivers renewable energy solutions for large-scale commercial partners, including technology companies. It operates a fleet of electrical power generation assets, including Antrim Wind Project, Lakeswind Facility, Old Town Wind Project, White Rock East Project, Mass Solar Project, Fortescue River Gas Pipeline, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TransAlta Upgraded to Outperform, Stock Rises 6.5%
- Rating Upgrade: National Bank Financial upgraded TransAlta (TAC) from Sector Perform to Outperform with a C$22 price target, anticipating several catalysts that could drive the stock higher.
- Project Value Reevaluation: The analyst noted that the recent 22% pullback in TAC's stock no longer reflects the value of its upcoming US$600M Keephills data center project and Centralia gas conversion, with Alberta power prices expected to recover to the mid-C$70s to mid-C$80s per MWh range.
- EBITDA Growth Outlook: At its investor day, TransAlta outlined a path to double-digit EBITDA growth through 2029, supported by an expected Alberta net load growth of 900-1,300 MW, which could push pool prices to $85-$120/MWh and drive EBITDA to $1.35B-$1.8B.
- Enhanced Financial Flexibility: The anticipated increase in free cash flow and growing debt capacity should further support TransAlta's financial flexibility to pursue a diverse mix of greenfield, brownfield, and accretive M&A opportunities, enhancing its competitive position in the market.
See More
TransAlta Partners with Pension Fund for Data Center Development
- Partnership Agreement: TransAlta has signed an exclusive agreement with the Canada Pension Plan Investment Board and Brookfield to serve as the power provider for a planned data center in Alberta, which is expected to enhance the company's positioning in emerging markets.
- Power Purchase Agreement: The MoU establishes a framework for phased development at the Keephills site, including an initial long-term power purchase agreement for approximately 230 MW, with potential expansion opportunities totaling up to 1 GW of load, indicating significant growth potential in renewable energy.
- Financial Performance Fluctuations: Although TransAlta reported a Q4 adjusted loss of C$0.06 per share, down from an adjusted profit of C$0.01 per share in the same quarter last year, the company raised its quarterly dividend to C$0.07, reflecting confidence in future cash flows.
- Revenue Decline Impact: The Q4 attributable loss slightly decreased to C$62 million, or C$0.21 per share, compared to a loss of C$65 million, or C$0.22 per share, in the prior year, but revenue fell 11% year-over-year to C$599 million, highlighting pressures from increased market competition.
See More
TransAlta Corporation Announces Investor Day in Toronto
- Investor Day Announcement: TransAlta Corporation will hold its Investor Day on March 23, 2026, in Toronto, starting at 9:00 a.m., aimed at providing investors with a comprehensive overview of the company's strategic priorities and long-term plans, which is expected to attract significant investor interest.
- Hybrid Format: The event will be hosted in a hybrid format, allowing investors to attend in person or via live webcast, reflecting the company's commitment to meeting investor needs while providing convenience for those unable to attend in person.
- Financial Outlook Presentation: During the Investor Day, TransAlta will share its financial outlook and growth opportunities, which is anticipated to provide investors with valuable market insights and a better understanding of the company's future direction.
- Recording Availability: For those unable to attend live, TransAlta will make a recording of the event and the corresponding presentation available, ensuring that all investors can access important information and enhancing communication between the company and its investors.
See More
TransAlta Reports Strong 2025 Financial Results Amid Challenges
- Strong Financial Performance: TransAlta reported a free cash flow of CAD 514 million (CAD 1.73 per share) for 2025, demonstrating resilience despite softer Alberta power prices, which enhances investor confidence in the company's financial stability.
- Dividend Increase: The Board approved an 8% increase in the common share dividend to CAD 0.28 per share, marking the seventh consecutive year of dividend growth, reflecting the company's commitment to shareholder returns and confidence in future prospects.
- Strategic Acquisition: On February 2, 2026, TransAlta completed the acquisition of Far North Power Corporation for CAD 95 million, adding 310 MW of capacity and strengthening its market position in Ontario, which is crucial for future growth.
- Future Outlook: The company expects adjusted EBITDA for 2026 to range between CAD 950 million and CAD 1.05 billion, with free cash flow projected between CAD 350 million and CAD 450 million, indicating optimism about future demand growth in the energy sector.
See More
TransAlta Signs MOU with CPP Investments and Brookfield for Data Centre Development
- Strategic Partnership: TransAlta has signed a Memorandum of Understanding with CPP Investments and Brookfield to advance data centre development in Alberta, positioning TransAlta as the exclusive site and power provider, which highlights its strategic focus on digital infrastructure.
- Power Purchase Agreement: The MOU includes an initial long-term power purchase agreement for approximately 230 MW, which is expected to robustly support Alberta's digital infrastructure, further solidifying TransAlta's position in the energy market.
- Future Development Potential: The agreement also evaluates additional development opportunities that could aggregate up to 1 GW of load, indicating TransAlta's proactive planning and adaptability to meet future energy demands.
- Infrastructure Investment: The Keephills site leverages TransAlta's large zoned land, existing transmission, and natural gas infrastructure, showcasing its capability in delivering complex projects, which is anticipated to attract further investment to drive economic growth in Alberta.
See More
TransAlta Releases Q4 Earnings and 2026 Outlook
- Earnings Overview: TransAlta reported a Q4 Non-GAAP EPS of -C$0.06 with revenues of C$599M, reflecting an 11.7% year-over-year decline, indicating challenges faced in the current market environment.
- Future Outlook: The company provided a 2026 outlook, projecting adjusted EBITDA between C$950M and C$1,050M, alongside free cash flow expectations of C$350M to C$450M, demonstrating confidence in future profitability.
- Per Share Projections: The anticipated free cash flow translates to a per-share estimate of C$1.18 to C$1.51, suggesting potential for substantial shareholder returns in the coming years.
- Market Reaction: Despite the current financial struggles, the company's optimistic outlook may alleviate some investor concerns, particularly in the context of the ongoing energy transition.
See More
TransAlta Upgraded to Outperform, Stock Rises 6.5%
- Rating Upgrade: National Bank Financial upgraded TransAlta (TAC) from Sector Perform to Outperform with a C$22 price target, anticipating several catalysts that could drive the stock higher.
- Project Value Reevaluation: The analyst noted that the recent 22% pullback in TAC's stock no longer reflects the value of its upcoming US$600M Keephills data center project and Centralia gas conversion, with Alberta power prices expected to recover to the mid-C$70s to mid-C$80s per MWh range.
- EBITDA Growth Outlook: At its investor day, TransAlta outlined a path to double-digit EBITDA growth through 2029, supported by an expected Alberta net load growth of 900-1,300 MW, which could push pool prices to $85-$120/MWh and drive EBITDA to $1.35B-$1.8B.
- Enhanced Financial Flexibility: The anticipated increase in free cash flow and growing debt capacity should further support TransAlta's financial flexibility to pursue a diverse mix of greenfield, brownfield, and accretive M&A opportunities, enhancing its competitive position in the market.
See More
TransAlta Partners with Pension Fund for Data Center Development
- Partnership Agreement: TransAlta has signed an exclusive agreement with the Canada Pension Plan Investment Board and Brookfield to serve as the power provider for a planned data center in Alberta, which is expected to enhance the company's positioning in emerging markets.
- Power Purchase Agreement: The MoU establishes a framework for phased development at the Keephills site, including an initial long-term power purchase agreement for approximately 230 MW, with potential expansion opportunities totaling up to 1 GW of load, indicating significant growth potential in renewable energy.
- Financial Performance Fluctuations: Although TransAlta reported a Q4 adjusted loss of C$0.06 per share, down from an adjusted profit of C$0.01 per share in the same quarter last year, the company raised its quarterly dividend to C$0.07, reflecting confidence in future cash flows.
- Revenue Decline Impact: The Q4 attributable loss slightly decreased to C$62 million, or C$0.21 per share, compared to a loss of C$65 million, or C$0.22 per share, in the prior year, but revenue fell 11% year-over-year to C$599 million, highlighting pressures from increased market competition.
See More
TransAlta Corporation Announces Investor Day in Toronto
- Investor Day Announcement: TransAlta Corporation will hold its Investor Day on March 23, 2026, in Toronto, starting at 9:00 a.m., aimed at providing investors with a comprehensive overview of the company's strategic priorities and long-term plans, which is expected to attract significant investor interest.
- Hybrid Format: The event will be hosted in a hybrid format, allowing investors to attend in person or via live webcast, reflecting the company's commitment to meeting investor needs while providing convenience for those unable to attend in person.
- Financial Outlook Presentation: During the Investor Day, TransAlta will share its financial outlook and growth opportunities, which is anticipated to provide investors with valuable market insights and a better understanding of the company's future direction.
- Recording Availability: For those unable to attend live, TransAlta will make a recording of the event and the corresponding presentation available, ensuring that all investors can access important information and enhancing communication between the company and its investors.
See More
TransAlta Reports Strong 2025 Financial Results Amid Challenges
- Strong Financial Performance: TransAlta reported a free cash flow of CAD 514 million (CAD 1.73 per share) for 2025, demonstrating resilience despite softer Alberta power prices, which enhances investor confidence in the company's financial stability.
- Dividend Increase: The Board approved an 8% increase in the common share dividend to CAD 0.28 per share, marking the seventh consecutive year of dividend growth, reflecting the company's commitment to shareholder returns and confidence in future prospects.
- Strategic Acquisition: On February 2, 2026, TransAlta completed the acquisition of Far North Power Corporation for CAD 95 million, adding 310 MW of capacity and strengthening its market position in Ontario, which is crucial for future growth.
- Future Outlook: The company expects adjusted EBITDA for 2026 to range between CAD 950 million and CAD 1.05 billion, with free cash flow projected between CAD 350 million and CAD 450 million, indicating optimism about future demand growth in the energy sector.
See More
TransAlta Signs MOU with CPP Investments and Brookfield for Data Centre Development
- Strategic Partnership: TransAlta has signed a Memorandum of Understanding with CPP Investments and Brookfield to advance data centre development in Alberta, positioning TransAlta as the exclusive site and power provider, which highlights its strategic focus on digital infrastructure.
- Power Purchase Agreement: The MOU includes an initial long-term power purchase agreement for approximately 230 MW, which is expected to robustly support Alberta's digital infrastructure, further solidifying TransAlta's position in the energy market.
- Future Development Potential: The agreement also evaluates additional development opportunities that could aggregate up to 1 GW of load, indicating TransAlta's proactive planning and adaptability to meet future energy demands.
- Infrastructure Investment: The Keephills site leverages TransAlta's large zoned land, existing transmission, and natural gas infrastructure, showcasing its capability in delivering complex projects, which is anticipated to attract further investment to drive economic growth in Alberta.
See More
TransAlta Releases Q4 Earnings and 2026 Outlook
- Earnings Overview: TransAlta reported a Q4 Non-GAAP EPS of -C$0.06 with revenues of C$599M, reflecting an 11.7% year-over-year decline, indicating challenges faced in the current market environment.
- Future Outlook: The company provided a 2026 outlook, projecting adjusted EBITDA between C$950M and C$1,050M, alongside free cash flow expectations of C$350M to C$450M, demonstrating confidence in future profitability.
- Per Share Projections: The anticipated free cash flow translates to a per-share estimate of C$1.18 to C$1.51, suggesting potential for substantial shareholder returns in the coming years.
- Market Reaction: Despite the current financial struggles, the company's optimistic outlook may alleviate some investor concerns, particularly in the context of the ongoing energy transition.
See More
