Algonquin Power & Utilities' (AQN) shares could be range-bound until investors get more clarity surrounding its potential redomiciling to the US, RBC Capital Markets said in a note emailed Monday.

The potential moving of Algonquin's headquarters to the US makes financial and strategic sense, RBC analysts said. Assuming the Internal Revenue Service agrees with the company's analysis on tax implications, the move would cut its tax burden starting in 2027, the analysts said.

With 82% of the company's revenues generated in the US, and only under 5% in Canada, US redomiciling would align better with its operating footprint, according to the note.

The analysts noted that Algonquin has also been implementing its plan to become a premium regulated utility, successfully completing three large rate cases this year that will boost its revenue run-rate.

RBC maintained the company's stock rating at sector perform and price target at $6.50.

Price: 5.99, Change: -0.08, Percent Change: -1.32