CA - Algonquin Power -30% in two days after weak Q3 results forecast

Algonquin Power & Utilities ( NYSE: AQN ) extends Friday's sharp losses, -13% in Monday's trading, as at least three analysts downgraded the stock after the utility reported a larger than expected Q3 adjusted loss and cut its full-year earnings guidance; shares have plunged 30% in the past two trading sessions.

TD Securities reduced its rating to Hold from Buy with a $10 price target, cut from $13, BMO Capital cut the stock to Market Perform from Outperform with an $11 PT, down from $17.50, and Desjardins lowered shares to Hold from Buy with an $11.50 PT, cut from $14.50.

Algonquin ( AQN ) now holds a valuation discount to Canadian power peers, which TD Securities said is "warranted given the lack of clarity for earnings growth prospects and the company's funding platform."

The stock now trades at depressed levels that offer attractive value, but BMO said "there are likely increasing risks of a 'strategic' dividend cut and funding needs are still high."

In its downgrade, Desjardins cited an "uncertain growth outlook, likely driven by a lack of balance sheet discipline, concerns around upcoming financial results, an elevated payout ratio, and questions on dividend growth and strategy."

Algonquin Power & Utilities' ( AQN ) history of big dividend raises is "now in trouble," with an $800M cash flow deficit before dividends which will be "a big hole to plug," Trapping Value writes in an analysis newly posted on Seeking Alpha .

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