With its repositioning into an independent power producer, UGE International Ltd. (UGE:TSX.V; UGEIF:OTCQB) is heading toward "more sustainable growth and profitability," wrote iA Capital Markets analyst Naji Baydoun.
Several external and internal factors are supporting its efforts. The U.S. must increase solar capacity to decarbonize electricity and meet carbon emissions objectives, Baydoun noted.
The country's solar energy market is expected to grow about 20% through 2035 and greater than 10% through 2050, added Baydoun. Projected growth for community solar is potentially even greater.
Because UGE finances its projects through a mix of debt and equity, Baydoun wrote, "the expected clean power tax incentives in the U.S. should provide policy certainty and support for UGE's investment outlook."
The company's backlog comprises projects totaling about 145 megawatts (145 MW) of solar power and its development pipeline, about 790 MW.
"We see significant upside potential to the current share price from continued execution on the current growth strategy and a potential positive valuation rerating over time," Baydoun wrote.
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Disclosures for iA Capital Markets, UGE, Jan. 12, 2022
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