Equity Valuation Brookfield Renewable Partners L.P.

Abstract

The main objective of this thesis is to establish a target price and provide an investmentrecommendation for trading Brookfield Renewable Partners L.P., one of the world’s largest renewable energy developers and operators. Given the increasing awareness of climate change, it is essential to evaluate whether clean energy companies are trading at a fair value.Multiple valuation methods, including sum-of-parts Discounted Cash Flow (“DCF”), Adjusted Present Value (“APV”), and Multiples analysis, were utilized to determine the target price. The findings reveal that as of January 1st, 2023, Brookfield Renewable Partners was undervalued by the market. The DCF and APV methodologies yield a STRONG BUY recommendation with target prices of $41.44 and $41.49, respectively, representing an average increase of 63% compared to the market price of $25.34 on December 30th, 2022. This view aligns with the predictions of other market analysts, while the multiples analysis suggests a BUY recommendation. The assumptions made throughout this analysis strive to accurately reflect the latest advancements in sustainable finance and the current macroeconomic conditions.Furthermore, I emphasize the importance of transitioning towards a zero-carbon economy and the pivotal role of clean energy power plants in achieving this goal. This thesis contributes to the understanding of equity valuation within the renewable energy industry and provides valuable insights for investors, policymakers, and other stakeholders.

Date of Award	26 Jun 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Zoe Venter (Supervisor)