We’ve recently updated our valuation analysis.

TransAlta Valuation

Is TA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TA?

Other financial metrics that can be useful for relative valuation.

TA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3x
Enterprise Value/EBITDA7.2x
PEG Ratio-0.5x

Price to Earnings Ratio vs Peers

How does TA's PE Ratio compare to its peers?

The above table shows the PE ratio for TA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average51.4x
CPX Capital Power
40.3x2.0%CA$5.1b
RNW TransAlta Renewables
41.9x55.5%CA$3.2b
BLX Boralex
119.6x19.0%CA$3.9b
MXG Maxim Power
3.7xn/aCA$199.1m
TA TransAlta
37.6x-82.6%CA$3.3b

Price-To-Earnings vs Peers: TA is good value based on its Price-To-Earnings Ratio (37.6x) compared to the peer average (51.4x).


Price to Earnings Ratio vs Industry

How does TA's PE Ratio compare vs other companies in the Global Renewable Energy Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a12.4%
n/an/an/a

Price-To-Earnings vs Industry: TA is expensive based on its Price-To-Earnings Ratio (37.6x) compared to the Global Renewable Energy industry average (14.9x)


Price to Earnings Ratio vs Fair Ratio

What is TA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio37.6x
Fair PE Ratio5.4x

Price-To-Earnings vs Fair Ratio: TA is expensive based on its Price-To-Earnings Ratio (37.6x) compared to the estimated Fair Price-To-Earnings Ratio (5.4x).


Share Price vs Fair Value

What is the Fair Price of TA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TA (CA$12.41) is trading below our estimate of fair value (CA$31.35)

Significantly Below Fair Value: TA is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst TA forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$12.41
CA$15.71
+26.6%
13.1%CA$20.00CA$12.00n/a12
Jan ’24CA$12.11
CA$15.96
+31.8%
12.9%CA$20.00CA$12.00n/a12
Dec ’23CA$12.75
CA$16.33
+28.1%
10.3%CA$20.00CA$14.00n/a12
Nov ’23CA$11.81
CA$15.79
+33.7%
12.0%CA$20.00CA$13.00n/a12
Oct ’23CA$12.21
CA$16.50
+35.1%
10.9%CA$20.00CA$14.00n/a12
Sep ’23CA$12.25
CA$16.33
+33.3%
7.9%CA$18.00CA$14.00n/a12
Aug ’23CA$14.66
CA$16.54
+12.8%
8.0%CA$18.50CA$14.50n/a12
Jul ’23CA$14.69
CA$16.67
+13.5%
6.4%CA$18.00CA$15.00n/a12
Jun ’23CA$14.48
CA$16.21
+11.9%
8.0%CA$18.00CA$14.00n/a12
May ’23CA$13.78
CA$16.13
+17.0%
8.7%CA$18.00CA$14.00n/a12
Apr ’23CA$12.99
CA$15.92
+22.5%
9.0%CA$17.00CA$13.00n/a12
Mar ’23CA$12.61
CA$16.25
+28.9%
6.1%CA$17.00CA$14.00n/a12
Feb ’23CA$13.75
CA$15.77
+14.7%
12.2%CA$17.00CA$10.00CA$12.7913
Jan ’23CA$14.05
CA$15.96
+13.6%
12.3%CA$17.50CA$10.00CA$12.1113
Dec ’22CA$13.24
CA$15.92
+20.3%
12.2%CA$17.50CA$10.00CA$12.7513
Nov ’22CA$13.86
CA$15.38
+11.0%
12.6%CA$17.50CA$10.00CA$11.8113
Oct ’22CA$13.31
CA$14.83
+11.4%
12.7%CA$18.00CA$10.00CA$12.2112
Sep ’22CA$12.38
CA$14.38
+16.1%
12.5%CA$18.00CA$10.00CA$12.2512
Aug ’22CA$13.01
CA$13.95
+7.3%
13.7%CA$18.00CA$10.00CA$14.6611
Jul ’22CA$12.35
CA$13.79
+11.7%
13.1%CA$18.00CA$10.00CA$14.6912
Jun ’22CA$11.25
CA$13.79
+22.6%
13.1%CA$18.00CA$10.00CA$14.4812
May ’22CA$12.08
CA$13.44
+11.3%
15.7%CA$18.50CA$9.30CA$13.7812
Apr ’22CA$12.10
CA$13.03
+7.6%
15.5%CA$18.50CA$9.30CA$12.9912
Mar ’22CA$11.15
CA$12.67
+13.6%
16.3%CA$17.50CA$8.50CA$12.6112
Feb ’22CA$11.57
CA$12.38
+7.0%
16.9%CA$17.50CA$8.50CA$13.7512

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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