Brookfield Renewable Corporation (TSE:BEPC) saw a decent share price growth of 11% on the TSX over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a large-cap stock, it seems odd Brookfield Renewable is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today we will analyse the most recent data on Brookfield Renewable’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Brookfield Renewable

Is Brookfield Renewable Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 15.07x is currently trading slightly above its industry peers’ ratio of 12.91x, which means if you buy Brookfield Renewable today, you’d be paying a relatively sensible price for it. And if you believe that Brookfield Renewable should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Is there another opportunity to buy low in the future? Since Brookfield Renewable’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Brookfield Renewable generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Brookfield Renewable, at least in the near future.

What This Means For You

Are you a shareholder? Currently, BEPC appears to be trading around industry price multiples, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on BEPC, take a look at whether its fundamentals have changed.