UPDATE: BMO Capital Markets Reiterates Underperform Rating, Lowers PT on Atlantic Power Corp. on Lower Operating Cash Flow

In a report published Monday, BMO Capital Markets reiterated its Underperform rating on Atlantic Power Corp. AT, but lowered its price target from $12.00 to $7.00. BMO Capital Markets noted, “In our eyes, reducing the dividend is a good first step for ATP in terms of strengthening its balance sheet and ability to deliver on acquisitions, which could ultimately translate into net asset value upside should these transactions unfold. However, the magnitude of the dividend reduction has likely eroded market confidence and therefore we highly doubt investors will give the company the benefit of the doubt particularly in light of the weaker financial outlook (especially the potential re-contracting challenges in Ontario and New York). We have reduced our target price to $7 from $12/sh and have maintained our Underperform rating, until the company can prove out its revised strategy of sustainable income and growth.” Atlantic Power Corp. closed on Friday at $7.12.