Hydro One Limited logo HRNNF - Hydro One Limited

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
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AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Stable Earnings Power 85% confidence

Primary model: P/Adj-EPS × Normalized Multiple

Valuation Signal Overvalued Strong
Trading 61.0% above fair value
Current Price $42.34
Bear Case $23.01 45.6% downside ($23.01 - $42.34) / $42.34 = -45.6% $1.64 × 14x P/E
Fair Value $26.30 37.9% downside ($26.30 - $42.34) / $42.34 = -37.9% $1.64 × 16x P/E
Bull Case $29.59 30.1% downside ($29.59 - $42.34) / $42.34 = -30.1% $1.64 × 18x P/E

Adjust Assumptions

16.0x
1.64$

Key Value Driver

Normalized P/E multiple (16x base case)

Implied Market Multiple 25.8x

Plain-Language Summary

Applying a 16x P/E to adjusted EPS of $1.64, the base-case value is $26.30 per share. DDM cross-check: $19.44.

Warnings

ℹ Dividend-based valuation: $19.44 (below our primary estimate by 26%). Large gaps may signal the dividend doesn't reflect full earning power.
ℹ 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