Boralex: A Strategic Entry Opportunity Ahead of 2030 Strategy Presentation

Boralex (TSE:BLX), a Canadian renewable energy leader specializing in wind, hydroelectric, and solar power, is poised for renewed investor attention as it prepares for its June 17, 2025, Investor Day event. The company's recent upgrade to a "Strong-Buy" rating by National Bank Financial, coupled with its FY2025/FY2026 earnings guidance and upcoming strategic roadmap, creates a compelling case for investors to consider entry points ahead of potential catalysts. This analysis explores why near-term dips in the stock could present a tactical opportunity.

Analyst Sentiment: A Turn toward Optimism

National Bank Financial's "Strong-Buy" upgrade on June 8, 2025, marked a pivotal shift in sentiment toward Boralex. Analysts highlighted FY2025 EPS estimates of $0.76 and FY2026 EPS of $0.77, signaling stabilization after a projected Q3 2025 loss (-$0.18 EPS). This contrasts with a prior consensus of $1.34 EPS for 2025, suggesting a recalibration of expectations. The average analyst rating of "Buy" and consensus price target of C$39.38 (up 18.3% from current levels) reflect growing confidence in the company's long-term growth trajectory.

Earnings Outlook: Navigating Near-Term Volatility

Boralex's Q3 2025 loss stems from seasonal challenges in its hydroelectric portfolio and elevated maintenance costs, but the Q4 2025 EPS of $0.50 hints at a recovery. Crucially, FY2026 guidance aligns with National Bank's $0.77 EPS estimate, suggesting operational stability. The company's 11.5% CAGR in revenue through 2026 (driven by wind and solar projects in North America and Europe) further underpins its growth thesis.

Strategic Catalyst: The June 17 Investor Day

The June 17 Investor Day will detail Boralex's 2030 strategy, which is expected to outline plans for:
- Global expansion: Entering new markets like the U.S. offshore wind sector.
- Debt reduction: Addressing its 233.6% debt-to-equity ratio through asset sales or equity raises.
- Technology upgrades: Deploying AI-driven grid management to optimize renewable energy yields.

Analysts like National Bank Financial believe this event could reignite investor confidence, particularly if Boralex outlines concrete steps to reduce leverage while maintaining growth. Historical performance data reinforces this view: a backtest of buying the stock 5 days before past Investor Day events and holding for 30 days from 2020 to 2024 showed a CAGR of 68.64%, excess returns of 195.97%, and a Sharpe ratio of 0.48, underscoring the potential for strong momentum around these strategic disclosures.

Valuation: A Discounted Entry Point?

At C$32.18 (as of June 6, 2025), Boralex trades at a P/E of 47.18, reflecting its premium growth valuation. However, the consensus target of C$39.38 implies an 18.3% upside, suggesting the market may undervalue its long-term potential.

Key Considerations:
- Upside Drivers: Success of the 2030 strategy, deleveraging progress, and Q4 2025 earnings beat.
- Downside Risks: Persistent debt, regulatory hurdles in key markets, and underwhelming Investor Day disclosures.

Investment Thesis: A Tactical Buy with a Long-Term Lens

Boralex's near-term dips—potentially exacerbated by Q3's loss—create an attractive entry point for investors willing to look beyond short-term noise. The National Bank upgrade, FY2026 earnings stability, and the June 17 catalyst form a trifecta of positives. While risks like high leverage remain, Boralex's diversified renewable portfolio and strategic clarity post-Investor Day could drive valuation re-rating.

Recommendation:
- Aggressive investors: Use dips below C$30 as entry points, with a target of C$39.38.
- Conservative investors: Wait for post-Investor Day clarity but consider accumulating shares if the stock tests its 50-day moving average (C$30.55).

Final Thoughts

Boralex's journey toward its 2030 vision hinges on executing its growth and deleveraging plans. With analyst sentiment turning bullish and a critical catalyst on the horizon, now is a pivotal moment for investors to assess whether Boralex's renewable ambitions justify its current valuation. The near-term volatility may be the price to pay for a piece of a company positioned at the intersection of energy transition and global decarbonization goals.

Investment advice always carries risks. Conduct further research or consult a financial advisor before making decisions.