I looked at their analysis and cannot figure out how they arrived at that recommendation.

Sure its relative valuation is higher than its peer group, but look at the peer group - the only one that is doing as well in terms absolute performance is Capital Power Corp. In other words, comparing AQN to a bunch of underperforming dogs is going to make it appear relatively overvalued.

It's revenue and net income continues to grow, and will continue as earnings accrue from its acquisition of Empire. Future acquisition plans reflect strong growth potential.

Their debt is a bit high (but not out of line with the sector) and in the last Q it paid dividends that were 100% of EPS. For me, though, a company that does not take advantage of low interest rates and the ability to write off debt expenses is foolish. As well, the forecasted EPS is to continue growing.

All in all, this company has been well managed over the past few years, and appears to have a lot of potential ahead.