National Bank Downgrades Algonquin Power (AQN) to Sector Perform, Keeps PT Unchanged

On Wednesday, National Bank downgraded Algonquin Power & Utilities Corp. (NYSE:AQN) to Sector Perform from Outperform, while keeping its price target unchanged at $6.75. This decision was influenced by AQN’s stock appreciation, which included a 40% rise this year and a 16% surge today. The analyst believes a neutral stance is warranted despite the company’s recent investor update, which provides clarity on a three-year earnings reset.

National Bank Downgrades Algonquin Power (AQN) to Sector Perform, Keeps PT at $6.75

An engineer in a control room monitoring a massive system, demonstrating the capabilities of rate-regulated utilities.

Algonquin Power reported adjusted net earnings of $111.6 million in Q1 2025, which marked a 39% increase from $80.1 million in Q1 2024. The Regulated Services Group saw a $40.8 million increase in net earnings, which was attributed to new rates and reduced interest expenses. The Hydro Group’s net earnings rose by $13.4 million due to a one-time tax recovery. Adjusted Net EPS was $0.14, which was flat compared year-over-year, including renewables. However, it was up from $0.11 when excluding renewables.

The company successfully implemented new rates that contributed $15.7 million to the Regulated Services Group in Q1. The Southwest Power Pool, which is a non-profit Regional Transmission Organization/RTO), also approved an investment of $750 to $800 million in transmission projects to reinforce the Empire District Electric service area. The investment directly benefits Algonquin Power by strengthening the electric grid in its Empire District Electric service area.

Algonquin Power & Utilities Corp. (NYSE:AQN) operates in the power and utility industries. The company operates through two main segments: Regulated Services Group and Hydro Group.

While we acknowledge the potential of AQN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AQN and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.