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    Algonquin Power & Utilities (TSX:AQN) Is Up 6.0% After Scotiabank Upgrade on Regulatory, Cost Gains

    Simply Wall St·12/17/2025 18:22:50
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    • Earlier this month, Scotiabank upgraded Algonquin Power & Utilities Corp. from Sector Perform to Sector Outperform, citing a stronger 2025–2027 outlook, operational improvements and progress on key regulatory filings.
    • The upgrade highlights how regulatory traction and cost-efficiency efforts are increasingly central to how investors assess Algonquin’s evolution into a focused regulated utility.
    • Now we’ll explore how Scotiabank’s upgraded rating, grounded in regulatory progress and cost cuts, could reshape Algonquin’s investment narrative.

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    Algonquin Power & Utilities Investment Narrative Recap

    To own Algonquin today, you need to believe in its pivot to a focused regulated utility, with improved returns on equity and smoother regulatory outcomes. Scotiabank’s upgrade supports that thesis by emphasizing operational progress, but the recent spike in implied volatility on deep out of the money puts underlines that regulatory and execution risks around rate cases and IT fixes still look like the key short term swing factors.

    The Q3 2025 results, which showed a return to positive net income of US$38.9 million and continued dividend payments, sit in the background of this upgraded view, suggesting incremental progress on earnings quality and cash generation. How durable that looks will likely depend on whether management and the new CFO can convert regulatory wins and cost cuts into a higher earned ROE and better coverage of interest and dividends.

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    Read the full narrative on Algonquin Power & Utilities (it's free!)

    Algonquin Power & Utilities' narrative projects $2.6 billion revenue and $447.9 million earnings by 2028. This requires 3.4% yearly revenue growth and about a $377 million earnings increase from $70.9 million today.

    Uncover how Algonquin Power & Utilities' forecasts yield a CA$8.33 fair value, in line with its current price.

    Exploring Other Perspectives

    TSX:AQN 1-Year Stock Price Chart
    TSX:AQN 1-Year Stock Price Chart

    Six members of the Simply Wall St Community currently see Algonquin’s fair value anywhere between US$8.33 and US$34.31 per share, showing how far apart individual views can be. Set that against the central catalyst of regulatory progress and cost cutting behind Scotiabank’s upgrade, and you have a wide field of opinion to explore before deciding how Algonquin might fit into your portfolio.

    Explore 6 other fair value estimates on Algonquin Power & Utilities - why the stock might be worth over 4x more than the current price!

    Build Your Own Algonquin Power & Utilities Narrative

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

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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.