TAC Should I Buy
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TransAlta Corp (TAC) is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company has shown some positive developments, such as signing a Memorandum of Understanding for data centers and increasing its dividend, the technical indicators, options sentiment, and recent financial performance suggest a cautious approach. The stock lacks strong upward momentum, and analysts' ratings are mixed, with a recent price target reduction. Additionally, the stock's short-term trend indicates potential downside risks.
The MACD histogram is negative and expanding, indicating bearish momentum. RSI is neutral at 44.591, suggesting no clear signal. Moving averages are converging, and the stock is trading near its pivot level of 13.175, with resistance at 13.591 and support at 12.759. Overall, the technical indicators do not suggest a strong buy signal.
Memorandum of Understanding with CPP Investments and Brookfield for data centers, securing a long-term power purchase agreement.
Dividend increase of 8%, reflecting strong financial performance.
Positive outlook for 2026 despite challenges.
Recent Q4 earnings report showed a Non-GAAP EPS of -C$0.06, missing expectations.
Revenue dropped 9.04% YoY in Q3 2025, and gross margin declined significantly by 40.55%.
Analysts' ratings are mixed, with a recent price target reduction from C$19 to C$18.
In Q3 2025, revenue dropped by 9.04% YoY to C$463M, while net income improved by 72.22% YoY to -C$62M. EPS increased by 75% YoY to -C$0.21. Gross margin fell significantly to 14.25%, down 40.55% YoY. The company reported a free cash flow of C$514M for 2025 and increased its dividend by 8%, signaling strong cash generation despite challenges.
Analysts' ratings are mixed. Desjardins recently lowered the price target to C$18 from C$19 and maintained a Hold rating. In December 2025, TD Securities raised the price target to C$27 from C$26 and maintained a Buy rating. This indicates some divergence in analyst sentiment.
