FTS
Fortis Inc.
$58.84
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 28.8% above fair value
You pay
$58.84
Bear
$39.97
Fair
$45.68
Bull
$51.39
Bear
$39.97
-32.1%
$2.62 × 14x P/E
Fair
$45.68
-22.4%
$2.62 × 16x P/E
Bull
$51.39
-12.7%
$2.62 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
22.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $61.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $45.68 per share.
Warnings
Dividend-based valuation: $31.17 (below our primary estimate by 26%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $61.00 (from 13 analysts). Our estimate is 31% below the consensus -- consider that gap carefully.
Financial statements were converted from CAD into USD using USDCAD at 0.7104 USD per CAD.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples