There’s lots to like about renewable energy company Boralex (Boralex Stock Quote, Chart TSX:BLX), says analyst Jeremy Rosenfield of Industrial Alliance Securities, who on Wednesday provided a client update, reaffirming his “Strong Buy” and $23.00 target for the stock.
Montreal-based Boralex On Tuesday released its strategic plan and financial objectives up to 2023 at the company’s Investor Day event in Toronto. Management said its plans are organized around four key strategic objectives: growth, diversification, customers and optimization.
“The plan announced today is built around the Corporation’s ongoing development in sectors with high growth potential and where the Corporation excels, while also initiating the deployment of new sources of revenue,” said Patrick Lemaire, President and CEO, in a press release.
Rosenfield came away from the investor day with the idea that Boralex is getting back to its roots as a renewable project developer in 2019.
“The headline takeaway for us from BLX’s investor day event is the strategic message to investors that after a highly acquisitive 2018, management is seeking to re-focus attention on the Company’s roots, as a ‘boots-on-the-ground’ renewable project developer,” Rosenfield says.
“We continue to like BLX’s: (1) highly contracted renewable power portfolio (~2GW in operation, ~13-year weighted average term), (2) healthy FCF/share growth (>10 per cent/year, CAGR 2018-23E), driven by capacity additions in Canada and Europe, (3)potential upside associated with the Company’s large development pipeline (>1GW of prospects in France alone), and (4) potential for long-term dividend growth (~three per cent yield, 40-60 per cent FCF payout target),” he writes.
The analyst thinks BLX will generate fiscal 2019 revenue and EPS of $532 million and $0.32 per share, respectively, and fiscal 2020 revenue and EPS of $533 million and $0.46 per share, respectively. His $23.00 target represents a projected return of 19.9 per cent at the time of publication.