Scotia Capital Analyst: Alternative Energy Sector - Long-Term 'Overweight'

Scotia Capital markets is launching coverage of alternative and renewable energy stocks with a long-term “overweight” recommendation.

Specifically, analyst Ben Isaacson is taking over coverage of Boralex (BRLXF.PK), Canadian Hydro Developers (CHDVF.PK), Earthfirst Canada and Plutonic Power Corp. (PUOPF.PK). He is also initiating coverage of Innergex Renewable Energy (INRGF.PK).

In a research note, he said:

Most equities within the renewable power space are down over  30% year to date.. When coupled with demand drivers that all appear to be strengthening, a compelling entry point into the space emerges.

Once shaky equity markets have reached a bottom, Mr. Isaacson said he anticipates a rebound in the sect or, led by intermediate  independent power producers that generate strong free cash flow and have well-funded growth plans.

Among the companies Mr. Isaacson now covers, he has “sector outperform” ratings on Boralex an electricity producer operating in Quebec, the northeastern United States and France - and Canadian Hydro Developers, which focuses on low-impact renewable energy technologies such as hydroelectric, biomass and wind energy in the provinces of Alberta, British Columbia, and Ontario. He has a C$18 target price on Boralex, which closed yesterday at C$14.49, and has a C$7 target on Canadian Hydro, which was down C$0.18 Monday to close at C$4.49.