Markets

Analyst Actions: Credit Suisse Neutral on Brookfield Renewable Energy

An active acquiror: "Brookfield Renewable Energy Partners (BEP) has been very active in the last few months in adding to its renewable portfolio. The recent acquisitions include: (a) a 378MW hydro portfolio from Alcoa Power Generating Inc. located in Tennessee and North Carolina; (b) a 351MW hydro portfolio in New England from a subsidiary of NextEra Energy; and (c) a successful battle for Western Wind Energy. We believe some assets may transact in the near future. Given Brookfield's investment style along with the ability to access multiple capital sources (public and private funds), several deals could be done in an accretive fashion."

American assets: "The United States is a very large renewable generation market with almost 150 GW of renewable power (based on the US Energy Information Administration data). The largest owners of hydroelectric power tend to be government entities, large electric utilities and co-operatives. Less than 10 GW of hydroelectric generation in our view are likely to transact. Of that amount, Brookfield is already a significant owner of greater than 3GW of US-based hydroelectric generation in the US. Current market conditions look to favour the potential divestitures of unregulated hydroelectric generation by those looking to de-lever balance sheets and reduce open market exposure."

Investment thesis: "We believe BREP's longer-term growth is supported by both acquisition and organic opportunities on a global basis."

Valuation: "Our Neutral rating and target price of C$33 is primarily obtained from a cash-on-cash yield valuation approach of roughly a 4.4% yield."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities

Latest Markets Videos