Innergex Renewable Energy Inc. (INGXF)

Does anybody here know much about the Renewable Utilities industry & sector, and can explain the last year?
I did a Yahoo Screener on Mid Cap US & Canadian companies in this sector. ALL of the ones the same size as INE (by Volume traded) have had almost the exact same year as INE - a massive climb in value from the end of last year to the Q1 2021. Then they all took a long slow dive to now. They are all at about half or two-thirds of the value they were at the start of the year (except one called Clearway Energy, which I know nothing about). AQN, RNW, BEPC, AY, INE, CWEN, NPI, ORA, NEP and ORA.

So, to me it looks like there's so industry-wide pattern happening. I don't know enough about the renewable energy markets to guess what's happening. Since the industry is so diverse (location-wise and energy-source), I can't see a macro effect that they are ALL experiencing, unless it's a negative effect from an alternative source (e.g., if oil and gas became so cheap this year that people would rather pay for that than pay for renewable). I may be wrong, but I doubt that's the problem.

So what is causing this systemic drop in price for all of the major Clean Energy companies for 2021?

Just saw this upgrade, to $25/share: https://www.cantechletter.com/2021/09/innergex-renewable-has-upside-from-here-says-ia-capital/

Innergex Renewable Energy (Innergex Renewable Energy Stock Quote, Chart, News TSX:INE) is down by about a third this year, but iA Capital Markets analyst Naji Baydoun is bullish on the renewable energy stock. Baydoun resumed coverage on Innergex with a “Buy” rating and a new target price of $25/share (previously $24/share) in an update to clients on Tuesday, saying the company has a high-quality, low-risk asset portfolio.

Headquartered in Longueuil, Que., and owned by Hydro Quebec, Innergex Renewable Energy is a developer, owner and operator of run-of-river hydroelectric facilities, wind energy, and solar farms in North America, with operations in Quebec, Ontario, British Columbia, and Idaho.

Baydoun’s coverage return comes after Innergex announced its intent to participate in a joint acquisition with Hydro Quebec of the Curtis Palmer hydro portfolio in New York from Atlantic Power Ltd. for approximately US$310 million (approximately $387.5 million), marking the company’s entry into the New York renewable energy market. (All figures in Canadian dollars except where noted otherwise.)

The transaction is expected to close in the fourth quarter of 2021, with the assets under contract through 2027.

“The acquisition will strategically expand INE’s hydro footprint and increase the hydro-based cash flows within the company’s portfolio, which could provide support for equity market valuation,” Baydoun said. “Furthermore, the transaction is the first joint acquisition by INE and HQ, and represents a “proof of concept” for the potential that the partnership can deliver in terms of further enhancing INE’s ability to source and execute on new growth opportunities.”

The company also announced $175 million in bought deal financing. The Curtis Palmer deal is expected to be accretive for the joint operation, with Curtis Palmer assets expected to generate approximately US$42.5 million per year in adjusted EBITDA, as well as approximately US$39.5 million per year in free cash flow through the expiry of the power purchase agreement.

“We are thrilled to announce this first joint acquisition with Hydro-Québec under the Strategic Alliance. The acquisition of Curtis Palmer represents an opportunity for Innergex to apply its 30 years of expertise in managing small run-of-river hydroelectric facilities, while leveraging Hydro-Québec’s experience in New York to get a foothold in a new market,” said Michel Letellier, President and Chief Executive Officer of Innergex in the company’s August 17 press release.

“After having been commercial partners with the State of New York for more than 100 years, we are now entering a new phase by investing directly in the State’s hydropower generation infrastructure alongside Innergex, to which we will both bring our extensive expertise. This investment clearly demonstrates our commitment to developing the share of renewables in the energy mix of North America,” added Sophie Brochu, President and CEO of Hydro Québec.

On top of the proposed acquisition, the company has remained busy in other markets, most notably in Chile, where the company acquired the remaining 50 per cent interest in renewable energy company Energía Llaima for an aggregate consideration of US$71.4 million ($89.4 million). Innergex further expanded its presence in the country by acquiring an 18 MW run-of-river hydro facility on the Licán River for US$40.5 million ($50.5 million) with an equity investment for Innergex of US$16.6 million ($20.6 million).

In the United States, the company also commissioned its Griffin Trail wind facility in Texas while increasing production at the Hillcrest solar facility in Ohio.

Innergex reported slight growth in its second quarter financial results, headlined by a three per cent year-over-year growth in proportionate revenue to $198.4 million, along with a four per cent year-over-year growth in proportionate adjusted EBITDA to $146 million

The proposed acquisition has prompted Baydoun to revise some of his financial estimates, with revenue now projected to hit $726 million instead of the original $720 million for 2021, which represents a potential year-over-year increase of 18.4 per cent. From there, Baydoun projects continued growth through 2024, where the $813 million forecast is a bump up from the initial $758 million projection, and represents a potential year-over-year increase of 1.9 per cent.

Why is Innergex's long-term debt so high (~$4bn), and are they paying it down? The payout ratio is ~121% of FCF! So either they're going to have to cut dividends, or they will have to borrow money to pay the dividend.

Since interest rates are likely to rise 'soon' (?some time in 2022? Who knows?), this will mean more of the Revenue having to go towards a growing debt.

I'd rather they reduced the debt, even if it means cutting my dividend, than going into a potential recession with a growing debt.

What do others think?