Update shared on 12 Nov 2025
Fair value Increased 3.20%Analysts have increased their average price target for Canadian Utilities from C$40.14 to C$41.43. They cite solid regulated results and modest improvements in revenue growth, despite ongoing market volatility.
Analyst Commentary
Recent Street research on Canadian Utilities highlights both positive factors driving analyst optimism as well as ongoing concerns that temper their outlook. Below is a summary of key bullish and bearish takeaways based on the latest research notes and price target adjustments.
Bullish Takeaways- Bullish analysts have raised their price targets, citing resilient regulated results and modest revenue growth even amid volatile market conditions.
- Utilities' regulated business segments are expected to meet or exceed consensus expectations, supported by solid customer demand and the introduction of new rates.
- Some analysts see utilities as a defensive hedge, particularly valuable in periods of market and credit spread volatility because their cash flows tend to remain stable.
- Valuation upside remains for investors seeking steady income and moderate growth, given improving sentiment and incremental increases in targets.
- Bearish analysts maintain a cautious stance on power generation segments, noting less favorable trends in key regions and muted pricing momentum.
- While third quarter results are likely to favor regulated utilities, relative growth prospects in the power sector are seen as more attractive for momentum-oriented investors.
- Market and credit volatility continue to pose risks to execution and the pace of future growth, leading some to recommend holding utilities only as part of a balanced portfolio.
What's in the News
- Canadian Utilities Limited will redeem all outstanding Cumulative Redeemable Second Preferred Shares Series FF on December 1, 2025, at $25.00 per share. The final quarterly dividend of $0.28125 per share will be paid on the same date. (Key Developments)
- The Alberta Utilities Commission has approved ATCO Energy Systems' Need Assessment Application for the Yellowhead Pipeline Project, advancing plans to expand Alberta's natural gas transmission capacity by more than 230 kilometres. Construction is expected to begin in 2026. (Key Developments)
- This pipeline project will enable delivery of more than 1,200 terajoules (1.1 billion cubic feet) of natural gas per day, supporting economic and population growth across Alberta. (Key Developments)
Valuation Changes
- Consensus Analyst Price Target has risen slightly from CA$40.14 to CA$41.43, reflecting growing optimism among analysts.
- Discount Rate increased from 5.97% to 6.12%. This indicates a marginal rise in perceived risk or required return.
- Revenue Growth projections improved from 7.41% to 7.63%. This points to moderately higher expectations for top line expansion.
- Net Profit Margin dropped slightly from 17.54% to 17.14%, suggesting a small decline in anticipated profitability.
- Future P/E ratio increased from 16.07x to 17.03x. This signals a higher valuation being placed on forward earnings.
Disclaimer
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