HRNNF
Hydro One Limited
$37.23
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 47.6% above fair value
You pay
$37.23
Bear
$22.07
Fair
$25.22
Bull
$28.38
Bear
$22.07
-40.7%
$1.58 × 14x P/E
Fair
$25.22
-32.2%
$1.58 × 16x P/E
Bull
$28.38
-23.8%
$1.58 × 18x P/E
Adjust Assumptions
16.0x
1.58$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
23.6x
Summary
Applying a 16x P/E to adjusted EPS of $1.58, the base-case value is $25.22 per share. DDM cross-check: $20.86.
Warnings
Financial statements were converted from CAD into USD using USDCAD at 0.7101 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