Does Hydro One's Earnings Growth Target Reshape Its Long-Term Value Proposition for Investors (TSX:H)?

• Hydro One Limited recently announced its third-quarter 2025 earnings, reporting year-over-year growth in revenue and net income, affirming a quarterly dividend, and providing annual earnings per share growth guidance of 6% to 8% through 2027 based on normalized 2022 EPS of CA$1.61.
• This combination of improved financial performance, forward-looking growth expectations, and continued infrastructure investment highlights the company’s focus on reliability and long-term shareholder value.
• We'll examine how Hydro One's updated annual earnings growth targets impact its investment narrative and outlook for long-term returns.

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Hydro One Investment Narrative Recap

To be a Hydro One shareholder, you typically need to believe that Ontario's growing electricity demand, supportive government policy, and the company's ongoing critical infrastructure investments will continue to drive stable, rate base-linked earnings growth. The latest earnings report and the reaffirmed annual EPS growth guidance of 6% to 8% through 2027 may reinforce confidence in this earnings-growth narrative, but the biggest risk, long-term regulatory uncertainty, remains unchanged and unaffected by this quarter’s positive results. Near-term catalysts, like progress in major rate applications, are still key to watch.

Among the latest company updates, Hydro One’s Board declared a quarterly dividend of CA$0.3331 per share, payable at year-end. While dividend continuity can be viewed as a marker of confidence in the stability of Hydro One's cash flows, investors should consider how sustained payouts interact with rising capital investment needs and potential equity issuances in the years ahead.

By contrast, it’s essential for investors to remain aware of the specific regulatory uncertainties that could challenge Hydro One’s...

Read the full narrative on Hydro One (it's free!)

Hydro One's outlook anticipates CA$9.5 billion in revenue and CA$1.5 billion in earnings by 2028. This is based on an expected 2.8% annual revenue growth rate and a CA$0.2 billion increase in earnings from CA$1.3 billion today.

Uncover how Hydro One's forecasts yield a CA$50.21 fair value, a 7% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community members put forward two fair value estimates for Hydro One, with a wide spread from CA$50.21 to CA$541.14 per share. These varied opinions stand against ongoing concerns about regulatory approval and rate-setting, giving you multiple starting points to explore what matters most for Hydro One’s future.

Explore 2 other fair value estimates on Hydro One - why the stock might be worth over 10x more than the current price!

Build Your Own Hydro One Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hydro One research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Hydro One research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hydro One's overall financial health at a glance.

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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.

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