FTS: Shares Will Balance Dividend Stability With Cautious Optimism On Expansion

Analysts have raised their average price target for Fortis, increasing it from $69.47 to $71.41. They cite improved earnings expectations, robust revenue growth, and a lower projected price-to-earnings ratio for the company.

Analyst Commentary

Following recent updates from street research, analyst sentiment on Fortis reflects a mix of optimism about execution and future growth opportunities, alongside ongoing caution regarding valuation and market positioning.

• Bullish analysts have raised their price targets for Fortis, pointing to the company’s robust rate base growth outlook and attractive earnings potential.
• The favorable energy demand trends across Fortis's diverse utility portfolio support expectations for a 7.0% five-year compound annual growth rate in the company’s rate base.
• Analysts highlight opportunities for further expansion, particularly in regions such as Arizona, where increased load could arise from potential data center developments.
• Consistent upward revisions to price targets over recent months indicate growing confidence in Fortis’s ability to execute and deliver on its long-term growth strategy.

• Bearish analysts remain cautious on Fortis’s valuation, with some expressing concern that recent gains may have already factored in much of the anticipated growth.
• A minority of analysts, including JPMorgan, maintain more reserved ratings and emphasize modest upside potential given the company’s current price-to-earnings ratio.
• There are ongoing questions about the pace of incremental growth opportunities and whether execution risks could impact the company’s ambitious expansion targets.

What's in the News

• The Board of Directors has declared a dividend of $0.64 per share on the Common Shares for the fourth quarter of 2025. The dividend will be payable on December 1, 2025 to shareholders of record as of November 17, 2025 (Dividend Increases).
• Fortis Inc. closed a private placement transaction on September 4, 2025 (Private Placements).
• The company entered into an agreement to issue senior unsecured notes for a total of CAD 750 million. The notes will bear interest at 5.100% per annum and are due December 4, 2055. Closing is expected on September 4, 2025 (Private Placements).
• Fortis launched its FortisPay extension for Adobe Commerce, earning App Assurance Program Certification and enhancing secure, scalable payment experiences for B2B and ecommerce businesses (Product-Related Announcements).

Valuation Changes

• Consensus Analyst Price Target has risen slightly from CA$69.47 to CA$71.41. This reflects increased optimism about Fortis's future value.
• The Discount Rate edged up marginally from 6.32% to 6.37%, indicating slightly higher return expectations or perceived risk.
• The Revenue Growth estimate improved from 4.38% to 4.83%, suggesting stronger anticipated sales expansion.
• Net Profit Margin advanced from 15.39% to 15.61%, pointing to modestly improved profitability forecasts.
• The Future P/E Ratio has fallen significantly from 25.80x to 20.80x. This signals expectations for stronger future earnings relative to today’s price.