TransAlta Corporation (NYSE:TAC) Given Average Recommendation of "Moderate Buy" by Analysts

Key Points

• Analyst consensus: Eight analysts give TransAlta an average rating of "Moderate Buy" (6 buys, 1 hold, 1 sell) with a 1‑year average target of $21.33.
• Earnings and balance-sheet warning: Q results missed estimates (EPS -$0.04 vs $0.05 expected; revenue $436.1M vs $493.4M), leaving a negative net margin (-7.51%), a high debt‑to‑equity ratio (6.54) and a negative P/E (-26.95).
• Dividend and institutional interest: TransAlta set a quarterly dividend of $0.07 (annualized $0.28, ~2.2% yield) while institutional ownership is about 59% amid large buys from Rubric Capital, BMO and new stakes by Norges Bank and Sculptor.

Shares of TransAlta Corporation (NYSE:TAC - Get Free Report) TSE: TA have been given an average rating of "Moderate Buy" by the eight research firms that are presently covering the company, MarketBeat reports. One equities research analyst has rated the stock with a sell rating, one has assigned a hold rating and six have issued a buy rating on the company. The average 1 year target price among brokerages that have issued ratings on the stock in the last year is $21.3333.

A number of equities analysts have recently commented on TAC shares. Canadian Imperial Bank of Commerce restated an "outperform" rating on shares of TransAlta in a research report on Thursday. Weiss Ratings reiterated a "sell (d+)" rating on shares of TransAlta in a research note on Wednesday, January 21st. Royal Bank Of Canada reissued an "outperform" rating and issued a $24.00 price target on shares of TransAlta in a report on Tuesday, March 24th. Finally, National Bank Financial upgraded shares of TransAlta from a "sector perform" rating to an "outperform" rating in a research report on Tuesday, March 24th.

TransAlta Stock Performance

Shares of TAC opened at $12.67 on Tuesday. TransAlta has a 52-week low of $8.34 and a 52-week high of $17.88. The stock's 50-day simple moving average is $13.13 and its 200 day simple moving average is $13.86. The company has a debt-to-equity ratio of 6.54, a quick ratio of 0.67 and a current ratio of 0.73. The stock has a market capitalization of $3.77 billion, a price-to-earnings ratio of -26.95 and a beta of 0.76.

TransAlta (NYSE:TAC - Get Free Report) TSE: TA last posted its earnings results on Friday, February 27th. The utilities provider reported ($0.04) earnings per share for the quarter, missing analysts' consensus estimates of $0.05 by ($0.09). TransAlta had a negative net margin of 7.51% and a positive return on equity of 10.00%. The company had revenue of $436.10 million for the quarter, compared to analysts' expectations of $493.39 million. Research analysts forecast that TransAlta will post 0.27 EPS for the current fiscal year.

TransAlta Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, July 1st. Investors of record on Monday, June 1st will be given a dividend of $0.07 per share. The ex-dividend date is Monday, June 1st. This is a positive change from TransAlta's previous quarterly dividend of $0.07. This represents a $0.28 annualized dividend and a yield of 2.2%. TransAlta's dividend payout ratio (DPR) is presently -40.43%.

Institutional Trading of TransAlta

Several institutional investors and hedge funds have recently modified their holdings of the business. Rubric Capital Management LP boosted its position in shares of TransAlta by 32.9% during the 2nd quarter. Rubric Capital Management LP now owns 15,948,451 shares of the utilities provider's stock valued at $172,084,000 after acquiring an additional 3,948,451 shares during the last quarter. Norges Bank purchased a new stake in TransAlta in the fourth quarter valued at approximately $45,298,000. Sculptor Capital LP bought a new stake in TransAlta during the fourth quarter valued at approximately $37,958,000. Bank of Montreal Can lifted its position in TransAlta by 27.5% during the fourth quarter. Bank of Montreal Can now owns 13,295,335 shares of the utilities provider's stock valued at $168,163,000 after purchasing an additional 2,870,026 shares during the last quarter. Finally, Aventail Capital Group LP purchased a new position in TransAlta in the 3rd quarter worth approximately $38,633,000. Hedge funds and other institutional investors own 59.00% of the company's stock.

About TransAlta

TransAlta Corporation, originally founded in 1909 as Calgary Power Company Ltd., is a publicly traded energy company specializing in the development, ownership and operation of power generation and transmission assets. Headquartered in Calgary, Alberta, TransAlta has grown from its early hydroelectric roots into a diversified energy provider with a multi-fuel generating fleet.

The company's core business activities encompass power generation, asset management and energy trading services.

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