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TransAlta Corp TAC

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Morningstar’s Analysis

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TransAlta Reports Strong First Quarter as Alberta Hydro Plants Take Advantage of PPA Expiration

Charles Fishman, CFA Equity Analyst

Analyst Note

| Charles Fishman, CFA |

We are increasing our fair value estimate to CAD 10 ($8.20) per share from CAD 9.30 ($7.35) after TransAlta reported strong 2021 first-quarter earnings and raised 2021 earnings guidance. Comparable EBITDA was CAD 310 million in the recently ended quarter versus CAD 220 million in the same period last year. The strong results were driven by the Hydro and Energy Trading segments.

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Company Profile

Business Description

TransAlta is an independent power producer based in Alberta, Canada. The company owns more than 70 power plants in Canada, the Western United States, and Australia. TransAlta's net generating capacity is approximately two thirds coal or natural gas-fired. The remaining one third consists primarily of hydroelectric plants and wind energy farms. We expect this mix to shift to more renewable energy as the company retires Alberta coal plants to comply with carbon emissions legislation. TransAlta also has an energy trading and marketing business and owns natural gas transmission lines.

Contact
110 - 12th Avenue SW, PO Box 1900, Station M
Calgary, AB, T2R 0G7, Canada
T +1 403 267-2014
Sector Utilities
Industry Utilities - Independent Power Producers
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type
Employees 1,487

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