Q: Please comment on TA's growth and financial outlook released today. Does the stock represent relative good value (risk/return) at this price level? Thanks
5i Research Answer:
TA raised its dividend by 9%, but its stock dropped anyway as its EBITDA forecast missed estimates. Forecast is for $1.15B to $1.3B, with the midpoint below estimates of $1.3B. Cash flow is expected at $450M to $600M, vs estimates of $658M. It did expand its growth targets to deliver up to 1.75 GW with a $3.5B investment by 2028. But the miss, and concern on rates, and new spending, concerned investors and the stock dropped the most in three years. We think it may drift lower and would give it some time for investors to digest the miss.