The unit price of Brookfield Renewable Partners L.P. (BEP.UN-T, BEP-N) has delivered a respectable price return of approximately 7 per cent year to date.
In addition to price appreciation, Brookfield Renewable provides investors with income, paying unitholders a quarterly distribution of 46.75 cents (U.S.) per limited partnership unit, equating to a yield of 6 per cent. Management targets average annual distribution increases of between 5 per cent and 9 per cent, historically announced in February.
Management's goal is to deliver long-term total annual returns (price return including distribution income) of between 12 per cent and 15 per cent.
From a technical perspective, the chart for Brookfield Renewable looks interesting with a bullish "golden cross" pattern. In addition, the unit price recently broke above a major resistance level, around $42, which is now a key support level.
A "golden cross" occurs when a short-term moving average, in this case, the 50-day moving average, crosses above a longer-term moving average, in this case, the 200-day moving average. When this occurs, it marks a potentially positive signal, suggesting the upward price momentum may have traction.
Many traders suggest waiting until the 50-day moving average crosses above the 200-day moving average by a certain percentage, such as 3 per cent, to confirm the bullish signal.
With respect to Brookfield Renewable, the rising 50-day moving average (at $40.05), recently crossed above the rising 200-day moving average (at $39.63).
In recent years when a "golden cross" surfaced, the unit price has rallied sharply. To illustrate this phenomenon, when a "golden cross" pattern surfaced in February 2014, the unit price soared over 33 per cent from the $31 level to nearly $42. More recently, in March 2106, when a "golden cross" pattern appeared, the unit price increased 8 per cent over the next six months.
From a fundamental perspective, the majority of analysts are positive on Brookfield Renewable. There are 11 analysts with buy recommendations, four analysts have hold recommendations, and two analysts have sell recommendations (from Accountability Research and Veritas Investment Research) .
The average 12-month target prices is $43.89, implying the unit price is nearly fully valued with low single-digit upside potential over the next year.
The consensus earnings before interest before interest, taxes, depreciation and amortization (EBITDA) was $1.73-billion in 2017, rising to $1.86-billion in 2018. The Street is forecasting funds from operations (FFO) of $2.01 in 2017 and $2.18 in 2018. The consensus adjusted funds from operations (AFFO) estimates are $1.77 in 2017 and $1.99 in the following year.