This analyst loves Hammond Power

Paradigm Capital analyst Razi Hasan initiated coverage of Hammond Power Solutions (Hammond Power Solutions Stock Quote, Chart, News, Analysts, Financials TSX:HPS.A) with a “Buy” rating and $361.00 target in a May 7 report, saying the company is well positioned for rising demand from electrification and data centre infrastructure.

“We view Hammond Power Solutions as the convergence of electrification and digital infrastructure transformation,” Hasan said.

Hasan said demand for dry-type transformers is being driven by data centre construction, grid modernization and broader electrification trends. He said Hammond’s backlog grew 95% year-over-year in Q1/26, supported by multi-year custom data centre projects that extend into 2027 and improve revenue visibility.

The company has also brought $100-million of expanded manufacturing capacity online ahead of schedule and plans another $15-million investment to increase custom transformer capacity, taking annualized capacity to about $1.2-billion.

Hasan said Hammond’s planned $365-million acquisition of AEG Power Solutions, expected to close in Q2/26, should expand its product set, power electronics capabilities and geographic reach.

Hasan values the stock at 17.5x his 2027 Adjusted EBITDA estimate, saying the shares still trade at a discount to peers despite stronger-than-average revenue and EBITDA growth.

He expects Hammond to generate Adjusted EBITDA of $194.2-million on revenue of $1.296-billion in fiscal 2026, improving to $245.0-million on revenue of $1.571-billion in fiscal 2027.

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