A CIBC analyst has increased the price target for Brookfield Renewable Partners (BEP, Financial) from $30 to $31, while maintaining an Outperform rating. The firm anticipates strong second-quarter performance from this Canadian regulated utilities company.
BEP Key Business Developments
Release Date: May 02, 2025
- Funds From Operations (FFO): $315 million or $0.48 per unit.
- FFO Per Unit Growth: Adjusted FFO per unit increased by 15% year-over-year; all-in basis increased 7% per unit year-over-year.
- Contracted Cash Flows: 90% contracted for approximately 14 years with 70% of revenue indexed to inflation.
- Hydroelectric Segment: Strong demand with 6,000 gigawatt hours available for recontracting over the next five years.
- New Capacity Commissioned: Approximately 800 megawatts of renewable energy capacity in the quarter.
- Development Pipeline: Expect to bring approximately 8 gigawatts online in 2025.
- Acquisitions: Committed or deployed $4.6 billion, including the privatization of Neoen and acquisition of National Grid Renewables.
- Liquidity: Ended the quarter with $4.5 billion of available liquidity.
- Debt Issuance: Issued CAD450 million of 10-year notes at the lowest coupon in the past five years.
- Unit Buyback: Approximately $35 million worth of units repurchased year-to-date.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brookfield Renewable Partners LP (BEP, Financial) reported a 15% year-over-year increase in FFO per unit, showcasing strong financial performance.
- The company successfully commissioned approximately 800 megawatts of renewable energy capacity in the quarter, with plans to bring approximately 8 gigawatts online in 2025.
- BEP has a diversified global platform with 45,000 megawatts of operating capacity, generating resilient and inflation-linked cash flows.
- The company has secured contracts to deliver an incremental 4,500 gigawatt hours per year of generation, indicating strong commercial progress.
- BEP's acquisition of Neoen and National Grid Renewables is expected to drive value creation through accelerated development activities and asset rotation programs.
Negative Points
- The recently announced tariffs on goods have created volatility in the market, potentially impacting development project returns and cash flows.
- There is an elevated level of uncertainty in the public markets for the renewable sector, affecting investor sentiment.
- Permitting delays in the US, particularly for projects requiring federal permits, could impact the pace of development.
- Despite strong fundamentals, lower public market valuations for renewable energy companies present challenges.
- The company faces potential risks from cost inflation and tariffs, although it claims to have limited exposure.
