-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
We initiate on shares of ACO with a 3-STARS (Hold) rating, which reflects our cautious stance on the Canadian Utilities (CU; ~70% of ACO's earnings) valuation, as well as our favor toward ACO's diversifying, faster growing, non-regulated businesses. While ACO has seen its multiple increase ~20% over the past 12 months (in line with CU), its absolute multiple trades ~4.5x lower than CU's, which we find favorable (13.9x vs. 18.3x). We believe ACO will benefit from CU's rate base growth in Alberta, with its exposure to energy infrastructure growth and data center promise. We expect the base revenue growth from CU to be 3%-5% plus 1%-3% from the Structures and Investment segments. Our 12-month price target of CAD76 is derived from a 14.5x earnings multiple applied to our FY 27 estimate. Our FY 26 adjusted EPS view is CAD4.81 and our FY 27 estimate is CAD5.24.