TransAlta Announces 2022 Financial Outlook

TransAlta (TAC) announced its 2022 financial outlook on Tuesday.

TransAlta owns, operates, and develops a diverse fleet of power generation assets in Canada, the United States, and Australia 

Key Points  

For fiscal 2022, TransAlta estimates that comparable EBITDA will be in the range of C$1.065 billion to C$1.185 billion, 

Free cash flow is expected to be between C$455 million (C$1.68 per share) and C$555 million (C$2.05 per share). Sustaining capital is expected to be in the range of C$150 million to C$170 million. 

The company will continue delivery of TransAlta’s clean power growth plan by making a final investment decision on 400-500 MW of additional clean power projects in Alberta, the United States, and Australia to generate incremental EBITDA of C$50 to C$70 million. 

CEO Commentary 

TransAlta president and CEO John Kousinioris said, “We are pleased to announce that our annual outlook highlights continuing strong cash flow expectations for 2022. Our fleet remains well positioned to capture the ongoing strength we see in the Alberta merchant market. We also remain focused on growth that creates value for our shareholders as we work to deliver on our 2 GW renewables growth target by 2025. In 2021, our team secured 600 MW of new renewables projects demonstrating our competitiveness and capability to deliver our growth strategy across all our geographies.” 

Wall Street’s Take 

On January 12, TD Securities analyst John Mould kept a Buy rating on TA while lowering its price target to C$17 (from C$17.50). This implies 32% upside potential. 

The rest of the Street is bullish on BNS with a Strong Buy consensus rating based on seven Buys and one Hold. The average TransAlta price target of C$16.49 implies 28% upside potential to current levels.   

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