NPI stock wins price target raise at IA Capital

Following news from its Baltic offshore wind project in Poland, Industrial Alliance analyst Naji Baydoun has raised his price target on Northland Power (Northland Power Stock Quote, Chart, News, Analysts, Financials TSX:NPI).

On September 19, Northland Power announced that its Baltic Power offshore wind project had signed a credit agreement to secure $5.2-billion in financing.

“Today’s announcement is a major achievement for Northland, our partners and the Baltic Power project,” said Mike Crawley, president and chief executive officer of Northland. “This milestone demonstrates the support from the global financial community and reflects their confidence in Northland and our ability to develop, procure, construct and finance large and complex offshore wind projects. Despite the recent challenges for the offshore wind sector in some markets, Northland continues to find a way to advance large-scale offshore wind projects with attractive economics.”

The analyst says this announcement should be paired with another similar development to follow shortly.

Overall, we view this update as a net positive (1) with execution on key offshore wind projects de-risking the growth outlook, and (2) by providing improved visibility on strong project returns. We expect NPI to provide similar updates on its large-scale offshore wind project in Hai Long in Taiwan before year-end, providing investors with greater clarity on final project costs and returns/economics. We also anticipate further updates on capital recycling initiatives shortly, providing incremental capital for growth and surfacing value for shareholders. In the meantime, the shares remain attractively valued from both an absolute and relative basis.”

In a research update to clients September 20, Baydoun maintained his “Buy” rating and raised his price target on NPI from $38.00 to $39.00, implying a return of 67.8 per cent at the time of publication.