Northland Power (TSX:NPI) Looks Cheap After Hai Long Turbines Start Feeding The Grid

Northland Power (TSX:NPI) has reached a key milestone at its 1.0 GW Hai Long offshore wind project in the Taiwan Strait, with all 73 turbines now installed and feeding power into the grid.

The Hai Long milestone lands at a time when Northland Power’s CA$22.22 share price has gained 21.69% year to date, while the 1-year total shareholder return has declined 7.03%. This signals that recent momentum has improved even though longer term holders have faced meaningful volatility.

Scan beyond Northland Power and compare this Hai Long milestone against other renewable-focused utilities screened as 42 power grid technology and infrastructure stocks to see how peers are positioned for long-term contracted cash flows.

After a 22% year to date climb and a Hai Long milestone that reduces project risk, Northland Power still trades below both intrinsic value estimates and analyst targets. Is the discount a sign of caution, or an opportunity?

Most Popular Narrative: 17% Undervalued

Northland Power’s most followed narrative pegs fair value at about CA$26.71 per share, compared with the recent CA$22.22 close. This means the current Hai Long progress sits against a valuation gap that still looks meaningful.

The build out of Hai Long and Baltic Power, which are close to full turbine installation and supported by long duration contracts, is set to add large scale offshore wind capacity that can support higher revenue and adjusted EBITDA once fully in service.

The ramp up of grid scale storage, from Oneida to Jurassic BESS in Alberta and the Polish BESS projects backed by long capacity contracts, is creating a second leg of contracted and merchant cash flows that can support margins and earnings resilience.

See why 58 investors see Northland Power as 17% undervalued.

Result: Fair Value of CA$26.71 (UNDERVALUED)

Still, the narrative around Northland Power hinges on avoiding fresh equity for Hai Long and on keeping large offshore wind and storage projects on budget and on schedule.

Find out about the key risks to this Northland Power narrative.

Next Steps

Mixed messages on Northland Power’s valuation and project risk only matter if you test them against your own framework, so move fast and weigh both sides with the full picture of 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Northland Power?

If Northland Power’s story has you thinking more broadly about your portfolio, do not stop here. Put a few more high conviction ideas on your radar today.

• Target resilient balance sheets and steady fundamentals by scanning companies in the list of solid balance sheet and fundamentals (7 results) that might better match your comfort with risk.
• Hunt for quality trading at a discount and let the 4 high quality undervalued stocks highlight candidates that align with your view on price versus business strength.
• Spot under-the-radar opportunities before the crowd and use the 10 high quality undiscovered gems to surface lesser known businesses with solid underlying metrics.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com