AltaGas Ltd (ALA:TSX) Analysts rate as a Strong Buy, $32 target

STA Research
by: STA Research
AltaGas

Based on the AltaGas Ltd stock forecasts from 11 analysts, the average analyst target price for AltaGas Ltd is CAD 32.24 over the next 12 months. AltaGas Ltd.’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of AltaGas Ltd is Slightly Bullish, which is based on 9 positive signals and 7 negative signals. At the last closing, AltaGas Ltd.’s stock price was CAD 30.34. AltaGas Ltd.’s stock price has changed by +0.68% over the past week, +0.96% over the past month and +26.95% over the last year.

Yesterday, Scotiabank Capital raised the target on the stock to $34 from $33, and maintained the Outperform rating.

STA Research maintained the Hold rating with a $27 target on the company.

In North America, AltaGas Ltd. is a provider of energy infrastructure. The company is divided into two segments: utilities and midstream. It primarily serves consumers in the Western Canada Sedimentary Basin, including residential, commercial, and industrial users. AltaGas Ltd. was established in 1994 and is based in Calgary, Alberta, Canada. 355 4th Avenue SW, Calgary, Alberta, T2P 0J1

 

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior total returns

The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

High dividend returns

The stock has outperformed its sector peers on average annual dividend returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile. This can be a good buy, especially if it is outperforming on a total return basis, for investors seeking high-income yields.

Superior capital utilization

The company management has delivered a better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Low debt

The company is less leveraged than its peers and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

Compared to its sector, this stock has shown top quartile earnings growth in the previous 5 years.

Superior Revenue Growth

Compared to its sector, this stock has shown top quartile revenue growth in the previous 5 years.

 

Analysts rate AltaGas Ltd. stock with a consensus Strong Buy rating with a 12-month average target price of CAD 32.24 per share.

 

What we don’t like:

Poor risk-adjusted returns

This company is delivering below median risk-adjusted returns to its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above the median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced on a cash flow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Overpriced on a free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

 

 

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