Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>TLNE has come under pressure after news of AEP and EXC protesting the power purchase agreement between TLNE and AWS. AEP and EXC are asking for a hearing by FERC</li>
<li>The process creates a headwind for TLNE and the timing of when, or if, the remaining $300M would be released in TLNE's agreement with AWS.  </li>
<li>The signal AEP and EXC are sending supports the long-term view on power supply. The power being diverted to AWS would put greater stress on the regulated power companies</li>
</ul>


TLNE has come under pressure after news of AEP and EXC protesting the power purchase agreement between TLNE and AWS. AEP and EXC are asking for a hearing by FERC
The process creates a headwind for TLNE and the timing of when, or if, the remaining $300M would be released in TLNE's agreement with AWS.  
The signal AEP and EXC are sending supports the long-term view on power supply. The power being diverted to AWS would put greater stress on the regulated power companies


<ul>
<li>TLNE is putting its growing cash balance to use by announcing a Dutch tender buyback of up to $600 million of its stock.</li>
<li>The Dutch tender establishes our price target of $120 is too low as we look ahead to 2025.</li>
<li>Our price target of $120 was based on TLNE generating approximately $700 million of adjusted EBITDA in 2024. We are now using our 2025 estimate for our price target</li>
</ul>


TLNE is putting its growing cash balance to use by announcing a Dutch tender buyback of up to $600 million of its stock.
The Dutch tender establishes our price target of $120 is too low as we look ahead to 2025.
Our price target of $120 was based on TLNE generating approximately $700 million of adjusted EBITDA in 2024. We are now using our 2025 estimate for our price target


<ul>
<li>TLNE reported Q1 results benefiting from its hedging program to offset the warmer winter in parts of the country. The Q1 results confirmed the commentary management had previously provided</li>
<li>TLNE sold its power plants in Texas subsequent to the first quarter ending. This should remove a large portion of volatility from TLNE’s operations</li>
<li>Spark spreads have continued to move in TLNE’s favor implying quarterly results this year could remain above expectations</li>
</ul>


TLNE reported Q1 results benefiting from its hedging program to offset the warmer winter in parts of the country. The Q1 results confirmed the commentary management had previously provided
TLNE sold its power plants in Texas subsequent to the first quarter ending. This should remove a large portion of volatility from TLNE’s operations
Spark spreads have continued to move in TLNE’s favor implying quarterly results this year could remain above expectations


<ul>
<li>TLNE announced the sale of three power plants in Texas for a higher figure than we were expecting. TLNE is selling 1.7GW of power in Texas for $785 million</li>
<li>The Texas power plants decrease TLNE’s footprint to thirteen sites and a total of 10.7 GW owned capacity.</li>
<li>After the Texas assets are sold TLNE would have thirteen power plants mostly in Pennsylvania with several across other states. Three of which are minority ownerships.</li>
</ul>


TLNE announced the sale of three power plants in Texas for a higher figure than we were expecting. TLNE is selling 1.7GW of power in Texas for $785 million
The Texas power plants decrease TLNE’s footprint to thirteen sites and a total of 10.7 GW owned capacity.
After the Texas assets are sold TLNE would have thirteen power plants mostly in Pennsylvania with several across other states. Three of which are minority ownerships.


<ul>
<li>TLNE reported fourth quarter results impacted by two unplanned maintenance issues and yet managed to report operating income and adjusted EBITDA for the period.</li>
<li>TLNE reported revenue of $527 million in the quarter compared to our forecast of $507 million. Energy related revenue dropped in the quarter due to two maintenance issues and seasonality.</li>
<li>TLNE’s stock has started to inch closer to our original target of $96, but we believe there is upside from there if TLNE is valued closer to other nuclear peers.</li>
</ul>


TLNE reported fourth quarter results impacted by two unplanned maintenance issues and yet managed to report operating income and adjusted EBITDA for the period.
TLNE reported revenue of $527 million in the quarter compared to our forecast of $507 million. Energy related revenue dropped in the quarter due to two maintenance issues and seasonality.
TLNE’s stock has started to inch closer to our original target of $96, but we believe there is upside from there if TLNE is valued closer to other nuclear peers.


United States

Talen Energy Corporation provides utility services. The Company generates, distributes, transmits, and markets electricity, as well as produces and supplies natural gas and other renewable energy products for residential and commercial users. Talen Energy serves customers in the United States.

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Talen Energy (TLNE US)

TLNE: Protest Validates Long Thesis

We view this attempt to block the power purchase agreement between TLNE and AWS as a signal there is a power shortage issue several years down the...

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TLNE: The Tale of the Quarter

TLNE reported Q4 results better than we were expecting and has hedged more of its exposure for 2024 and 2025 placing TLNE on greater stability in...

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