Morningstar Rating

Stock Research and Analysis

by Andrew Bischof, CFA

Bulls Say

Calpine's natural gas fleet is one of the most efficient in the U.S., averaging an adjusted steam-heat rate of 7,300 Btu/KWh.
Calpine should benefit from an uptick in economic activity, increasing electricity use, and tighter supply-demand conditions in power markets, particularly in Texas and the Mid-Atlantic.
Environmental regulation should lead to the closure of many older coal units, tightening the supply-demand balance. Read more 

Bears Say

Calpine's natural gas fleet lacks its peers' diversification. Most of its peers have coal and nuclear plants that can benefit when natural gas prices rise.
Higher natural gas prices have depressed fleetwide capacity factors, which were at peak levels in 2012 given low gas prices.
Market conditions, including commodity prices, high leverage, and excessive capacity previously forced Calpine into bankruptcy. Read more 

Management

Calpine's current management team has demonstrated good shareholder stewardship since the company returned from bankruptcy. Unlike many of its peers, low gas prices have helped Calpine manage through the downturn with strong margins. In our view, management   Read more 

Profile

Calpine is an independent power producer with 25.4 gigawatts of generation capacity throughout the United States and Canada, assuming the company closes its sale of six   Read more 

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