Will Two Straight Quarterly Losses Shift TransAlta's (TSX:TA) Profit Outlook and Growth Ambitions?

• TransAlta Corporation recently reported second quarter 2025 earnings, showing sales of C$433 million and a net loss of C$99 million, compared to sales of C$582 million and net income of C$69 million a year earlier.
• This marked the second consecutive quarter of losses for TransAlta, reflecting ongoing challenges with profitability and revenue momentum despite continued dividend payouts.
• With quarterly losses prevailing for another period, we'll examine how this impacts confidence in TransAlta's projected profitability and growth initiatives.

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TransAlta Investment Narrative Recap

To be a TransAlta shareholder, you need to have confidence in its ability to recover earnings power through operational improvements and integration of new assets, even as revenue and profit challenges persist. The recent quarterly loss underscores significant near-term pressure, and while it doesn't alter the outlook for key milestones like the full integration of Heartland assets, it does highlight that the biggest risk, sustained weak electricity pricing and rising costs in Alberta, remains a hurdle for short-term results.

Among the latest announcements, the continued affirmation of dividends stands out, especially as TransAlta posts consecutive losses. This signals an intent to manage capital returns to shareholders even in tough quarters, and ties into the short-term catalyst of achieving more stable and contracted cash flows from new asset additions, which may help support those payouts if operational headwinds can be managed accordingly.

Yet, in contrast, investors should be aware of the ongoing risk that low Alberta power prices and rising costs might...

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

TransAlta's narrative projects CA$2.3 billion revenue and CA$136.9 million earnings by 2028. This requires a 4.2% annual revenue decline and a CA$135.9 million earnings increase from CA$1.0 million currently.

Uncover how TransAlta's forecasts yield a CA$18.23 fair value, a 7% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have fair value estimates for TransAlta ranging from C$18.23 to C$48.19, based on two individual perspectives. These divergent views highlight debate around future earnings recovery, especially given current margin pressures and Alberta market risks.

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

Build Your Own TransAlta 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 TransAlta research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free TransAlta research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate TransAlta'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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