Algonquin Power (AQN) Shares Drop 2.76% to Two-Year Low on Strategic Shift, CEO Departure

Algonquin Power (AQN) shares hit a two-year low on Sept. 2, with an intraday drop of 2.76%, marking the weakest level since June 2025. The decline follows a series of strategic and operational developments that have reshaped investor sentiment toward the utility firm.

The company announced in August its decision to sell its Renewable Energy Group, a strategic pivot aimed at reducing leverage and refocusing on core regulated utilities. This move coincided with the departure of CEO David Banskota, signaling a leadership shift under pressure from activist investor Starboard Value, which had acquired a 5% stake in June. Analysts noted that the renewable segment’s underperformance, including declining returns on reinvestment and rising capital expenditures, has weighed on overall profitability.

Brokerage firms have adjusted their outlooks accordingly. RBC Capital Markets cut its price target to C$8.00 in early September, while Desjardins revised earnings estimates downward in August. Despite these cautious adjustments, CIBC and National Bank Financial acknowledged the strategic review as a potential long-term value driver, even as they highlighted ongoing challenges in capital efficiency and debt management.

Q2 2023 earnings underscored mixed signals: AQN reported $0.04 per share, meeting estimates but falling short of the prior year’s $0.09. While intrinsic value calculations suggest the stock was 35% undervalued, concerns persist about sustaining profitability post-divestiture. The company’s dividend policy, however, remains a draw, with a 4.6% yield and consistent payouts despite earnings volatility.

Institutional investors have shown renewed interest, with Point72 Europe acquiring a 0.13% stake in August. Analyst consensus remains neutral, with an average price target of $6.31 and a “Hold” rating. The upcoming Q3 earnings and progress on the renewable unit’s sale will be critical in determining whether the stock can stabilize or regain momentum.