A Look at Hannon Armstrong (HASI) Valuation Following $500M Green Bond Issuance for Sustainability Initiatives

HA Sustainable Infrastructure Capital (HASI) has announced the issuance of $500 million in 8.000% Green Junior Subordinated Notes due 2056. This marks a meaningful step in strengthening its long-term financing for sustainability initiatives.

See our latest analysis for HA Sustainable Infrastructure Capital.

After a steady stretch earlier in the year, HA Sustainable Infrastructure Capital’s share price has picked up momentum with a 23.9% gain over the past month and a 1-year total shareholder return of 16.2%. This suggests renewed optimism following recent financing moves. Over the longer term, returns have been mixed, but the boost from the latest announcement reflects shifting sentiment and the potential for further upside as market focus turns to sustainability-driven growth.

If this surge in momentum has you wondering what else is catching investor attention, now is an ideal moment to broaden your search and discover fast growing stocks with high insider ownership

With momentum building after the recent green bond issuance, the key question is whether HA Sustainable Infrastructure Capital is now undervalued or if the market has already priced in further growth. This presents a real dilemma for would-be buyers.

Price-to-Earnings of 14.2x: Is it justified?

HA Sustainable Infrastructure Capital is currently trading at a price-to-earnings (P/E) ratio of 14.2x, which positions the stock just above the average for the US Diversified Financial industry and well below the peer group’s average.

The price-to-earnings multiple measures how much investors are willing to pay for each dollar of a company’s earnings. For sustainability-focused financial groups like HASI, this ratio reflects the expectations the market places on future profitability and growth from green finance.

While HASI’s P/E ratio is slightly higher than the industry average of 14x, it is less than half the peer average of 28.8x. This suggests that although the market recognizes HASI’s growth and sustainability profile, it is not assigning the hyper-premium reserved for some competitors. If the market consensus around fair value multiples shifts, HASI’s multiple could move in either direction, reflecting future optimism or skepticism.

Explore the SWS fair ratio for HA Sustainable Infrastructure Capital

Result: Price-to-Earnings of 14.2x (ABOUT RIGHT)

However, sustained outperformance is not guaranteed. Rising interest rates and regulatory changes could quickly shift market sentiment and impact future returns.

Find out about the key risks to this HA Sustainable Infrastructure Capital narrative.

Another View: SWS DCF Model Offers a Different Perspective

Switching gears, the SWS DCF model values HA Sustainable Infrastructure Capital at $36.63, which is about 6.2% higher than the current share price. This method suggests the stock could be undervalued, giving investors fresh food for thought. Are expectations really too low, or is the market missing something?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out HA Sustainable Infrastructure Capital for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 914 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own HA Sustainable Infrastructure Capital Narrative

If you see things differently or enjoy forming your own perspective, you can explore the numbers and create a unique viewpoint in just a few minutes. Do it your way

A great starting point for your HA Sustainable Infrastructure Capital 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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