Algonquin Power. Buy, Sell or Hold?

Desjardins Securities analyst Brent Stadler expects “another vanilla quarter” from Algonquin Power (Algonquin Power  Stock Quote, Chart, News, Analysts, Financials TSX:AQN) when it reports fourth-quarter results on Feb. 25, a characterization he views positively for the utility as it continues to execute on its turnaround.

As reported by the Globe and Mail, Stadler reiterated a “Buy” rating and raised his 12-month price target to US$7.25 from US$7.00, above the Street average of about US$6.75.

“AQN remains a preferred name,” he said.

In a Feb. 5 investor note, Stadler said he has maintained his estimates heading into the quarter and remains broadly in line with consensus. He pointed to a modest weather tailwind, noting higher heating degree days in Missouri, up roughly 6% year over year, which could provide incremental support to adjusted EPS. Stadler continues to model adjusted EPS of US$0.05 for the quarter, in line with consensus, and US$0.31 for the full year, consistent with Algonquin’s guidance range of US$0.30–US$0.32.

Stadler said recent developments in Missouri strengthen the longer-term outlook. He highlighted data centre-related news and population migration trends in the state, calling Missouri an attractive destination due to access to land and water and relatively lower power prices. He also noted a recent decision by the Joplin City Council to approve rezoning for a potential data centre site.

“In our view, given CEO Rod West’s data centre experience and hyperscaler relationships from his days at Entergy, it is possible that this opportunity could move along relatively quickly,” Stadler said, adding that any data centre-related commentary from Algonquin would likely be well received given management’s track record.

Stadler said he does not expect a near-term guidance increase with the fourth-quarter results, but believes Algonquin could look to update or extend its outlook later in 2026, potentially including 2028 guidance. Such an update, he said, would likely reinforce the view that Algonquin can outgrow utility peers in the near term as it continues to execute on its turnaround strategy.

-30-