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

by: FP Trading Desk

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 (OTC:BRLXF), Canadian Hydro Developers (PINK:CHDVF), Earthfirst Canada and Plutonic Power Corp. (OTC:PUOPF). He is also initiating coverage of Innergex Renewable Energy (OTC:INRGF).

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.