On Thursday, RBC Capital updated its outlook on Boralex Inc. (BLX:CN) (OTC: BRLXF) shares, raising the price target to Cdn$38.00 from the previous Cdn$36.00. The firm maintained a Sector Perform rating on the renewable energy company's stock.
The adjustment reflects a positive view of Boralex's potential for growth following its recent activity in the renewable energy sector. The company has submitted bids for projects in both the United Kingdom and New York, indicating an expansion of its development pipeline.
RBC Capital highlighted the impact of the Canadian Investment Tax Credit (ITC) on Boralex's financial projections. The ITC, which had not been factored into some of the company's base case economics for projects, is expected to reduce the equity required for these projects and significantly enhance their returns.
The firm's decision to increase the price target is based on the anticipated benefits Boralex is likely to reap from the ITC in the coming years. This tax credit is seen as a key factor in improving the company's financial performance.
The new price target of Cdn$38.00 represents RBC Capital's estimation of Boralex's value, taking into account the company's strategic moves and the favorable tax environment. The Sector Perform rating suggests that the analyst believes Boralex will perform in line with the expectations for its sector.
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