A Look at Boralex (TSX:BLX) Valuation Following Q3 Results and Expanding Project Pipeline

Boralex (TSX:BLX) shares caught investors’ attention following the release of its third quarter results. The company reported higher power production and made progress on new projects. However, its quarterly loss also widened this period.

See our latest analysis for Boralex.

Boralex’s latest quarterly results and the commissioning of the Apuiat wind farm sparked renewed interest, but the 1-year total shareholder return of -11.3% shows that long-term momentum is still recovering. Short-term share price returns have picked up lately, which suggests cautious optimism as the company continues its expansion and project pipeline growth.

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With shares trading well below analyst price targets, but earnings continuing to disappoint, the big question remains: is Boralex undervalued after its recent setbacks, or is the market already factoring in its future growth prospects?

Most Popular Narrative: 24.9% Undervalued

Boralex’s widely tracked narrative sets a fair value considerably above the last close price, outlining a bullish outlook driven by growth catalysts and market reforms. This contrast between market price and narrative value highlights where consensus sees future upside, despite recent disappointments.

Large increases in North American clean electricity demand, driven by government policy shifts such as Quebec's Bill 69 and Ontario's new procurement windows, are expected to create significant opportunities for Boralex to capture new PPAs and expand its asset base. This is likely to drive revenue and earnings growth through greater market share.

Read the complete narrative.

Want to know the blueprint behind this premium valuation? Forecasts for profit margins and ambitious expansion plans could be the secret ingredients. Curious how these projections stack up to past performance? Click to uncover the numbers that power this fair value.

Result: Fair Value of $38.10 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, exposure to declining contract prices in France and heightened competition from larger players could present challenges for Boralex’s earnings outlook and growth narrative.

Find out about the key risks to this Boralex narrative.

Another View: Challenging the Upside Case

While the analyst consensus points to Boralex being undervalued, our DCF model suggests an even greater discount. Boralex trades at nearly 79% below its estimated fair value. This significant gap might signal an unusual opportunity or indicate that the market is bracing for risks not fully visible in typical forecasts. Which view will ultimately play out?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Boralex Narrative

If you want to take a different view or prefer hands-on analysis, you can craft your own story using the full dataset in just a few minutes, and Do it your way

A great starting point for your Boralex research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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