Here's What Analysts Are Forecasting For Fortis Inc. (TSE:FTS) After Its Second-Quarter Results

It's been a good week for Fortis Inc. (TSE:FTS) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.9% to CA$57.90. Fortis missed revenue estimates by 3.9%, coming in atCA$2.7b, although statutory earnings per share (EPS) of CA$0.67 beat expectations, coming in 3.3% ahead of analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Fortis

Following the latest results, Fortis' eight analysts are now forecasting revenues of CA$12.3b in 2024. This would be a notable 8.3% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CA$3.22, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$12.0b and earnings per share (EPS) of CA$3.20 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

Even though revenue forecasts increased, there was no change to the consensus price target of CA$56.18, suggesting the analysts are focused on earnings as the driver of value creation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Fortis at CA$62.00 per share, while the most bearish prices it at CA$38.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Fortis' rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Fortis to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Fortis analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Fortis (1 is potentially serious) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com