TransAlta (TAC) has "solid" cash flow generation and a supportive capital allocation framework as it hopes to get bigger, RBC Capital Markets analysts said in a Tuesday note to clients.

Analysts said that TransAlta has "attractive" earnings before interest, taxes, depreciation, and amortization, or EBITDA, and free cash flow per share growth rates.

At its investor day event, TransAlta announced a 2029 EBITDA trajectory of between $1.35 billion and $1.80 billion, implying a three-year compound annual growth rate of 11% to 22% compared with the 2026 guidance range midpoint of $1 billion, analysts noted.

RBC said that the 2029 EBITDA trajectory assumes net load growth of 900 megawatt, or MW, to 1,300 MW in Alberta, and power prices that average mid-$80 per megawatt-hour, or MWh, to low $120 per MWh.

Analysts said that even by assuming power prices at a "conservative" $60 per MWh, they expect the company to report a three-year free cash flow per share compound annual growth rate of around 20%, an "attractive" figure.

RBC has an outperform rating on the stock and a 24 Canadian Dollar ($17.46) price target.

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