Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 27 Mar, 25 | NPI | Buy | CAD 19.9 | CAD 20.895 | CAD 22.149 | 12 days | 11.3% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Northland Power Inc., an independent power producer, develops, builds, owns, and operates clean and green power projects in Canada, Netherlands, Germany, Spain, Colombia, and internationally. The company produces electricity from renewable resources, such as wind and solar, as well as natural gas for sale under power purchase agreements and other revenue arrangements. It owned or had an economic interest 3.4 gigawatts of operating generating capacity. The company was founded in 1987 and is headquartered in Toronto, Canada.
The company increased its annual revenue from CAD 2.23 billion to CAD 2.35 billion.
Net income improved from a loss of CAD 96 million in 2023 to a gain of CAD 371 million in 2024.
Quarterly revenue from energy sales dropped from CAD 626 million in 2023 to CAD 572 million in 2024.
Adjusted Free Cash Flow per share declined from CAD 1.97 in 2023 to CAD 1.53 in 2024.
Northland faces risks related to currency fluctuations, regulatory changes, and potential delays in large-scale renewable energy project execution, all of which could impact financial performance and growth prospects.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 19.9 | 17.95 | 20.895 | 22.149 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Financial Performance and Growth
Northland Power delivered strong operating results in 2024, achieving the high end of its financial guidance. The company reported revenue from energy sales of CAD 2.35 billion for the year, reflecting an increase from CAD 2.23 billion in 2023. Net income improved significantly, reaching CAD 371 million compared to a net loss of CAD 96 million in the prior year. Additionally, Northland successfully completed a 23 MW upgrade of the Thorold natural gas facility on time and within budget, further demonstrating its technical expertise.
Strategic Leadership and Expansion
On January 20, 2025, Christine Healy assumed the role of President, Chief Executive Officer, and Director, marking a strategic leadership transition. Under her direction, the company continues to focus on global energy expansion with active projects in Poland, Taiwan, and Canada. Northland is progressing with the construction of its 2.4 GW of renewable energy projects, including Baltic Power, Hai Long, and Oneida, all of which are on track to contribute to earnings between 2025 and 2027.
Construction and Development Updates
Significant progress has been made across Northland’s major renewable projects. The Hai Long project has completed over 50% of its construction and is scheduled to begin power generation in the second half of 2025. Baltic Power commenced major in-water construction in January 2025, while the Oneida project is nearing full operational status in the first half of 2025. Additionally, the company secured key contracts and permits for the 80 MW Jurassic BESS project in Alberta, further expanding its renewable portfolio.
Financial Guidance and Shareholder Initiatives
Looking ahead, Northland issued its 2025 financial guidance, expecting Adjusted EBITDA to range between CAD 1.3 billion and CAD 1.4 billion. Adjusted Free Cash Flow and Free Cash Flow per share are projected between CAD 1.30 to CAD 1.50 and CAD 1.10 to CAD 1.30, respectively. The company also announced modifications to its Dividend Reinvestment Plan (DRIP), eliminating the 3% discount and opting to source shares from the open market instead of treasury issuances, effective April 15, 2025.
Balance Sheet and Liquidity
Northland reinforced its financial position with a robust balance sheet and available liquidity of CAD 1.1 billion. In November 2024, the company extended the maturity of EBSA’s non-recourse credit facility to November 2027, securing an additional CAD 35 million in financing. The improved debt terms support continued capital investments and hedging activities, enhancing Northland’s long-term financial flexibility.
Challenges and Risk Considerations
Despite strong overall performance, Northland faced challenges, including a decline in quarterly revenue from energy sales to CAD 572 million from CAD 626 million in 2023. Additionally, Adjusted Free Cash Flow per share dropped from CAD 1.97 in 2023 to CAD 1.53 in 2024. The company also encountered an operational setback at the Hai Long project, where an onshore substation incident resulted in three fatalities. Moving forward, key investment risks include exposure to foreign exchange fluctuations, regulatory uncertainties in energy markets, and potential project execution delays.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Northland Power Inc (TSX: NPI) at the closing market price of USD 19.90, as on March 26, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Utilities Industry: Utilities - Renewable
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| NPI Northland Power Inc. |
0.03 0.16% | 18.59 | 84.21 | 16.64 | 2.15 | 1.26 | 5.05 | 9.27 |
| BEPC Brookfield Renewable Corp |
0.26 0.68% | 38.31 | - | 15.17 | 1.66 | 1.16 | 4.45 | 10.75 |
| AQN Algonquin Power & Utilities Corp |
-0.12 1.61% | 7.34 | 9.12 | 16.26 | 1.96 | 0.79 | 4.32 | 9.44 |
| BLX Boralex Inc |
0.05 0.17% | 30.09 | 35.46 | 27.47 | 3.53 | 2.01 | 6.80 | 10.90 |
| INE Innergex Renewable Energy Inc. |
-0.02 0.15% | 13.49 | - | 56.50 | 1.79 | 2.03 | 8.63 | 15.06 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 26,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.
