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TransAlta Corp TAC

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Increased Confidence in TransAlta’s Development Pipeline; Increasing Fair Value Estimate

Charles Fishman, CFA Equity Analyst

Analyst Note

| Charles Fishman, CFA |

We are increasing our fair value estimate for TransAlta Corp. to CAD 8.50 ($6.55) per share from CAD 8 ($6) due in large part to our increased confidence in the company’s renewable energy development pipeline. The strengthening of the Canadian dollar to $0.77 per U.S. dollar from $0.75 since our last update also benefitted the fair value estimate of the U.S.-listed shares by about $0.17 per share.

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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 50% coal-fired and 20% natural gas-fired. The remaining 30% consists primarily of hydroelectric plants and wind energy farms. We expect this mix to shift to more renewable energy and gas-fired generation as the company retires Alberta coal plants to comply with carbon emissions legislation. TransAlta also has an energy trading and marketing business and owns transmission lines.

110 - 12th Avenue SW
Calgary, AB, T2R 0G7, Canada
T +1 403 267-2014
Sector Utilities
Industry Utilities - Independent Power Producers
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 1,543