Barclays Starts Brookfield Renewable Energy (BEP) at Equalweight

Barclays analyst Christine Cho initiates coverage on Brookfield Renewable Energy (NYSE: BEP) with a Equalweight rating and a price target of $27.00.

The analyst comments: "Brookfield Renewable Partners LP (BEP) is a globally diversified owner and operator of renewable power assets. As a yieldco, its assets generate long-term, low-risk cash flows, which are paid out to investors as distributions, while new development and M&A is primarily funded with new capital - mostly through non-recourse debt with the remainder comprised of upfinancings, asset sales, and corporate debt. While from an EV/EBITDA valuation perspective, BEP looks attractive relative to its closest comp (CWEN - not covered), it trades about the same from a CAFD yield perspective (see Figure 3 for details). However, BEP has a higher payout ratio and more elevated leverage ratios. Access to capital markets will be imperative to executing the growth strategy for FFO and distributions. Due to BEP's size and scale, we do expect them to increase their distribution by ~6% over the next couple of years as they manage through the higher levels of capex (vs. recent history), but think the safety cushion could be a bit bigger, especially given all the current macro and policy uncertainty."

For an analyst ratings summary and ratings history on Brookfield Renewable Energy click here. For more ratings news on Brookfield Renewable Energy click here.

Shares of Brookfield Renewable Energy closed at $22.57 yesterday.

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