Clearway Energy . Class C Stock Earnings Reports

Clearway reported a strong Q3 2025 and narrowed 2025 CAFD guidance to the top half of the prior range; management provided expanded forward visibility with new targets and a detailed funding plan. Key takeaways for investors: 1) New long-term target — management established a 2030 CAFD per share target of $2.90 to $3.10 (implying roughly 7%–8% CAGR from the 2025 midpoint) and reiterated confidence in hitting the top of the updated 2027 target; 2) Near-term guidance — 2025 CAFD guidance narrowed to $420M–$440M and 2026 CAFD guidance was set at $470M–$510M (Sarah: Q3 CAFD was $166M; YTD CAFD $395M; adjusted EBITDA Q3 $385M, YTD $980M); 3) Multiple growth pathways — growth through fleet enhancements/repowerings (notably wind repower campaign including Mt. Storm, Goat Mountain, San Juan Mesa), sponsor-developed drop-downs (several accretive drop-downs in 2025–2026), and disciplined third-party M&A (recent deals at >12% CAFD yields); 4) Large development pipeline — Clearway Group has an extensive late-stage pipeline (several gigawatts for 2028–2029 and ~30 GW total enterprise pipeline) and is developing multi-technology complexes (renewables + storage +/- flexible gas) to serve hyperscaler/data-center clusters; 5) Capital allocation and funding — plan to fund growth primarily with retained cash flow (payout ratio targeted to trend below 70% long-term), prudent corporate debt (target corporate debt/EBITDA ~4.0–4.5x), and modest, opportunistic equity issuance when accretive; 6) Portfolio optionality and upside — management expects existing fleet amortization and PPA renewals/recontracting, repowerings and higher power prices to drive low single-digit organic cash growth, with additional 3–5 percentage points of growth possible by deploying >30% of retained cash flows into projects yielding >10% CAFD; 7) Execution evidenced — recent drop-downs delivered better-than-expected operational results and CAFD yields, and three third-party acquisitions closed at >12% CAFD yields. Overall, management conveyed conservative assumptions in modeling the 2030 target while emphasizing multiple redundant pathways to achieve sustained CAFD per share growth and a funding plan designed to limit dilution and preserve credit metrics.