Greencoat UK Wind PLC's (LSE:UKW) third-quarter NAV was a little better than expectations, said broker Jefferies.
A lack of any net impact from power prices suggests some strength throughout the back end of the assumptions given the lower forward curve during the quarter.
Elsewhere, the additional stake in Kype Muir Extension has resulted in more return accretion than a similar absolute amount spent on share buybacks.
UKW's extensive portfolio refinancing also further extends its term debt maturities into the ROC expiration period post-2030, highlighting the confidence of lenders in the fund's cash-generation profile.
Stifel adds it was a fairly quiet quarter for Greencoat UK with NAV little changed and no material changes in assumptions or key factors in the valuation.
Generation was 9% lower than budget over the quarter, continuing the trend over this year and many periods in recent years.
UKW is the first renewable fund to report the third quarter and this trend on generation is in line with its expectations generally, noted the broker.
"We think we will see a similar generation undershoot at many of the other wind and solar funds for this period."
Stifel adds that it likes Greencoat UK's dividend growth policy, being the only renewable fund linking its dividend size to RPI growth, but this means the rate of dividend increase in 2025 is likely to be much lower than the 14.2% increase delivered this year, given RPI has fallen to 2.7%.
At 134p, the shares are on a 15% discount to NAV, with a dividend yield of 7.5%, which offers reasonable value, says the broker.
"We retain a positive recommendation and would argue given the solid long-term track record and dividend growth profile, the shares should trade on a sub-10% discount."