<div id="readability-page-1"><div><p>TransAlta (TSX:TA) has landed back on investors radar after two intertwined developments: a three month federal order keeping its Centralia Unit 2 coal plant online and a US$400 million senior note issue to bolster flexibility.</p> <p>See our latest analysis for TransAlta.</p> <p>Despite the headline noise around Centralia and the new senior notes, the share price has drifted to about CA$17.25, with a roughly 15 percent year to date share price decline contrasting with a still impressive five year total shareholder return near doubling. This suggests long term momentum is intact even as short term sentiment cools.</p> <p>If this kind of repositioning in the power space has you thinking more broadly about opportunities, it could be worth exploring fast growing stocks with high insider ownership.</p> <p>With the share price down this year but still trading at a steep discount to analyst targets and embedded growth projects, is TransAlta quietly undervalued right now, or is the market already pricing in its future upside?</p> <h2>Most Popular Narrative: 26.9% Undervalued</h2> <p>With TransAlta last closing at CA$17.25 versus a narrative fair value of about CA$23.59, the valuation hinges on some bold profit and margin shifts.</p> <blockquote> <p><em>Analysts assume that profit margins will increase from -6.7% today to 9.2% in 3 years time. Analysts expect earnings to reach CA$188.9 million (and earnings per share of CA$0.38) by about September 2028, up from CA$-167.0 million today.</em></p> </blockquote> <p>Read the complete narrative.</p> <p>Want to see what drives such a dramatic swing from losses to healthy profits, even as revenue shrinks on paper? The narrative leans on a powerful margin reset, aggressive earnings rebuild, and a future valuation multiple that would turn a utility into a growth-style story. Curious how those pieces fit together, and what has to go right to justify today’s discount?</p> <p><strong>Result: Fair Value of $23.59 (UNDERVALUED)</strong></p> <p>Have a read of the narrative in full and understand what's behind the forecasts.</p> <p>However, faster decarbonization mandates or weaker Alberta power prices could pressure margins, delay projects and undermine the aggressive earnings rebound included in forecasts.</p> <p>Find out about the key risks to this TransAlta narrative.</p> <h2>Another View: Ratios Tell a Different Story</h2> <p>Step away from the narrative fair value and the picture gets messier. On sales, TransAlta trades at 2.1 times revenue versus a fair ratio of 1 times, even while still looking cheaper than industry and peers. Is this a margin of safety, or a value trap if growth slips?</p> <p>See what the numbers say about this price — find out in our valuation breakdown.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/ebdb02f8-41d4-4280-9449-718d3cd99c3f/chart/ps-multiple-vs-industry?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/ebdb02f8-41d4-4280-9449-718d3cd99c3f/chart/ps-multiple-vs-industry"/><figcaption>TSX:TA PS Ratio as at Dec 2025</figcaption></figure><h2> Build Your Own TransAlta Narrative</h2> <p>If you are not fully aligned with this perspective or want to dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.</p> <p>A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding TransAlta.</p> <h2>Looking for more investment ideas?</h2> <p>Consider scanning multiple opportunities so you can compare a range of setups aligned with your style, risk appetite, and long term wealth goals.</p> <ul> <li>Explore fast moving, low priced opportunities by scanning these 3624 penny stocks with strong financials that already show strong underlying financial strength instead of unstable speculation.</li> <li>Position yourself ahead of emerging technology trends by reviewing these 25 AI penny stocks that pair artificial intelligence tailwinds with attractive market entries.</li> <li>Identify potential value before it becomes widely followed by focusing on these 914 undervalued stocks based on cash flows where discounted cash flow analysis still suggests room for appreciation.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p><div><p>Mobile Infrastructure for Defense and Disaster</p><p>The next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.</p><p>Get the investor briefing before the next round of contracts</p><p><span>Sponsored On Behalf of CiTech</span></p></div></div></div>

<p>TransAlta (TSX:TA) is under investor scrutiny following a federal order extending its Centralia coal plant operation and a US$400 million senior notes issue. Despite a 15% share price decline this year, analysts see long-term potential with a fair value of CA$23.59, suggesting the stock is undervalued. Analysts predict profit margins to rise significantly by 2028, but caution against risks like decarbonization mandates. The stock trades at 2.1 times revenue, raising questions about its valuation safety. Investors are encouraged to explore broader opportunities and build custom investment narratives.</p>

TransAlta (TSX:TA) Valuation Revisited After Centralia Extension Order and US$400 Million Senior Notes Issue