The Bull Case For Capital Power (TSX:CPX) Could Change Following Battery Storage Expansion and Reaffirmed Guidance

• Capital Power recently reported its third quarter 2025 results, highlighting increased sales to C$1.20 billion and a new long-term contract for its Midland Cogeneration Venture, alongside the commissioning of 170 MW of battery storage in Ontario.
• Although net income declined and CFO Sandra Haskins announced her retirement, the company maintained its 2025 financial guidance, signaling ongoing confidence amid operational changes and project delays.
• We will explore the implications of reaffirmed guidance and battery storage expansion on Capital Power's broader investment outlook.

Find companies with promising cash flow potential yet trading below their fair value.

Capital Power Investment Narrative Recap

To be a shareholder in Capital Power, I believe the key is confidence in rising long-term North American electricity demand, the company's expanded U.S. market exposure, and its ability to execute on energy storage and contract extensions. The latest results, stronger sales, new contracted revenue, and battery storage coming online, help reinforce the main short-term catalyst: stable, contracted cash flows. However, net income declines and project delays are a continued risk, but the impact from this quarter alone is not material to the overall thesis.

One announcement that stands out is the completed 170 MW of battery storage in Ontario, which began operations with long-term contracts extending to 2047. This directly supports Capital Power’s efforts to secure more predictable future revenues, addressing the catalyst of locking in higher-priced power purchase agreements and meeting growing demand driven by electrification and data centers.

However, investors should be aware that, despite reaffirmed guidance, the growing risk of regulatory shifts or prolonged execution delays could impact cash flows if...

Read the full narrative on Capital Power (it's free!)

Capital Power's narrative projects CA$4.1 billion revenue and CA$521.7 million earnings by 2028. This requires 5.0% yearly revenue growth and a CA$92.3 million decrease in earnings from CA$614.0 million today.

Uncover how Capital Power's forecasts yield a CA$73.96 fair value, a 3% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members recently estimated Capital Power’s fair value between C$57.14 and C$161.67, spanning 3 unique perspectives. While many see potential in long-term contract growth, cash flow risks remain critical for future performance.

Explore 3 other fair value estimates on Capital Power - why the stock might be worth over 2x more than the current price!

Build Your Own Capital Power Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Capital Power research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Capital Power research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Capital Power's overall financial health at a glance.

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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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