Can Hammond Power stock go even higher?

National Bank Financial analyst Baltej Sidhu raised his target on Hammond Power Solutions (Hammond Power Solutions Stock Quote, Chart, News, Analysts, Financials TSX:HPS.A) to $380.00 from $355.00 on Oct. 13 after touring the company’s Monterrey, Mexico facility.

As reported by the Globe and Mail, Sidhu maintained his “Outperform” rating on Hammond. The average target is $383.29.

The analyst said the visit increased his confidence in management’s ability to scale efficiently, use its customer relationships and benefit from strong end-market demand.

“Against a backdrop of sustained infrastructure investment, we believe HPS has a long runway for growth and is poised to continue compounding shareholder value as it evolves from a transformer manufacturer into a broader power platform,” Sidhu said.

Sidhu said Hammond’s Mexican operations are well run and executing smoothly.

He argued that the Guelph, Ont.-based company has differentiated itself in a competitive labour market through investment in its workforce, including a central technical training facility that is helping build skilled labour and reduce turnover.

The visit reinforced his view that Hammond is executing well against a strong demand backdrop, with the recently announced Fort Worth expansion providing evidence of sustained demand.

Sidhu believes the key share-price catalyst remains continued backlog growth and conversion.

He estimates Hammond is currently operating with about $1.4-billion of revenue capacity, excluding Microsol Resources Corporation (AEG), which Hammond acquired earlier this year. The Fort Worth expansion and efficiency initiatives are expected to lift run-rate capacity above $1.7-billion, initially adding $250-million and expandable to $400-million.

The analyst said that capacity could support roughly two times Adjusted EBITDA growth compared with 2025 levels before any contribution from AEG.

The main risk, he wrote, is that any period of slower backlog growth or sequential backlog decline could pressure the shares, even if caused by increased throughput, order timing or a lumpier mix of larger projects rather than weaker end-market demand.

“We believe the underlying trajectory remains positive as capacity scales and orders convert into revenue,” Sidhu said.

He said he will also look for more detail on AEG integration with Q3 2026 results, which will include a full quarter of contribution.

Sidhu said a recent business acquisition report highlighted near-term risk related to AEG’s exposure to Middle East disruption, though he continues to see a long runway for growth and value creation.

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