Fortis (FTS) AI Stock Analysis

• Market Cap: $40.55B
• Dividend Yield: 3.5%
• Average Volume (3M): 2.10M
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.13
• Revenue Growth: 5.21%
• EPS Growth: 4.27%
• Country: CA
• Employees: 9,800
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.90
• Shares Outstanding: 507,400,000
• 10 Day Avg. Volume: 2,101,287
• 30 Day Avg. Volume: 2,098,160
• PEG Ratio: 4.04
• Price to Book (P/B): 1.51
• Price to Sales (P/S): 2.95
• P/FCF Ratio: -16.54
• Enterprise Value/Market Cap: 1.85
• Enterprise Value/Revenue: 6.15
• Enterprise Value/Gross Profit: 16.57
• Enterprise Value/Ebitda: 12.71
• 1Y Price Target: $74.61
• Price Target Upside: -6.65% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 3.62
• Revenue Forecast (FY): $13.29B

• Rating: 67 Neutral
• Price Target: C$87.00 ▲(8.86% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by resilient regulated-utility fundamentals but weighed down by persistently negative free cash flow and elevated leverage. Technicals are a clear positive with a strong uptrend across moving averages and positive momentum. Valuation is reasonable for the profile, supported by a ~3.1% dividend yield but not especially cheap at ~20x earnings.

Positive Factors

Regulated utility business model

A regulated-rate business provides durable, predictable cash flows because utilities recover prudently incurred costs plus an authorized return on invested capital. This structure reduces earnings cyclicality and ties long-term growth to rate-base expansion supported by approved capital programs.

Consistent multi-year revenue and profit growth

Steady top-line and net income gains across years indicate expanding scale and sustained demand for regulated services. For a utility, multi-year revenue and profit growth reflect successful execution of capital programs and rate cases that embed higher allowed returns into future earnings.

Improving operating cash flow

Rising operating cash flow underpins the company's ability to run operations and support capital programs without immediate operational distress. Strong OCF improves coverage of interest and working capital needs and supports the utility's case in regulatory filings despite negative free cash flow.

Negative Factors

Persistently negative free cash flow

Chronically negative FCF means the company must continually access external financing to fund capex and dividends. Over a multi-month to multi-year horizon, this raises refinancing and funding-cost risk, constrains flexibility, and can pressure credit metrics if market rates or funding conditions worsen.

Elevated and rising leverage

A growing debt base with consistently elevated leverage reduces financial cushion and increases sensitivity to higher interest rates. For a capital-intensive utility, rising borrowings narrow strategic flexibility, elevate refinancing risk, and can limit the firm's ability to absorb adverse regulatory or operational shocks.

Earnings dependent on regulatory outcomes

Fortis's ability to convert investment into allowed earnings depends on regulators approving cost recovery and authorized returns. Regulatory delays, lower allowed returns, or disallowed costs across jurisdictions can materially and persistently reduce expected returns on invested capital.

Fortis Business Overview & Revenue Model

Company Description

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 438,000 retail customers in southeastern Arizona; and 100,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,485 megawatts (MW), including 53 MW of solar capacity and 252 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,065,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 577,000 customers in southern and central Alberta; owns 4 hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 143 MW; and on Prince Edward Island with a generating capacity of 130 MW. Additionally, it provides integrated electric utility service to approximately 68,000 customers in Ontario; approximately 272,000 customers in Newfoundland and Labrador; approximately 32,000 customers on Grand Cayman, Cayman Islands; and approximately 16,000 customers on certain islands in Turks and Caicos. The company also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,200 circuit Kilometers (km) of distribution lines; and approximately 50,500 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

How the Company Makes Money

Fortis primarily makes money by earning regulated returns on the utility infrastructure it owns and operates. Most revenue is generated by charging customers (and, in some cases, other market participants) regulated rates for electricity delivery (distribution and transmission) and for natural gas distribution. These rates are set through regulatory processes and are designed to allow recovery of prudently incurred operating costs (e.g., maintenance, labor, fuel/purchased power where applicable, and administrative costs) plus an authorized return on the company’s regulated rate base (its invested capital in utility plant such as lines, substations, meters, pipelines, and related equipment). A key driver of earnings is growth in rate base from capital investment programs—when new infrastructure is placed into service and included in rate base, it can increase the allowed earnings over time, subject to regulatory approval. Fortis also earns revenue from service fees and other regulated charges approved in tariffs (such as connection fees, demand charges, and customer service charges), and may have limited other income depending on individual utility jurisdictions; if specific non-regulated revenue streams or material partnership-driven revenues exist, they are not available here and are therefore null.

Fortis Financial Statement Overview

Summary

Income statement strength (74) shows steady multi-year revenue and profit growth with stable utility-like margins, supported by predictable regulated segments. This is tempered by a more leveraged balance sheet (62) with rising debt and constrained flexibility, and a weak cash flow profile (48) where free cash flow is persistently negative, implying ongoing reliance on external funding despite improving operating cash flow.

Income Statement

Revenue has grown steadily over the period (from ~8.9B in 2020 to ~12.2B in 2025), with profits rising alongside it (net income ~1.27B to ~1.80B). Profitability looks solid and fairly stable for a regulated utility, with net margin in the mid-teens in recent years (about 13–15% in 2021–2024). The main weakness is that top-line growth has been uneven at times (roughly flat in 2024 after a stronger 2022–2023), which can limit earnings momentum.

Balance Sheet

The balance sheet reflects a typical utility capital structure: large asset base (~74.8B in 2025) supported by meaningful leverage. Debt has increased over time (~24.9B in 2020 to ~34.7B in 2025), and leverage is consistently elevated (debt-to-equity around 1.3–1.4 in 2020–2024). Equity has grown, but not fast enough to offset rising borrowings, which keeps financial flexibility more constrained and raises sensitivity to funding costs.

Cash Flow

Operating cash flow is consistently positive and improving (about 2.7B in 2020 to ~4.1B in 2025), which supports the stability of the business. However, free cash flow is negative every year shown (including about -2.17B in 2025 and -1.34B in 2024), indicating heavy investment needs and/or funding of growth that likely requires ongoing external financing. This persistent cash shortfall is the key risk factor in the cash flow profile.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.17B	11.51B	11.52B	11.04B	9.45B
Gross Profit	8.80B	5.22B	4.86B	4.41B	3.97B
EBITDA	5.89B	5.29B	4.92B	4.50B	4.02B
Net Income	1.80B	1.68B	1.57B	1.39B	1.29B
Balance Sheet
Total Assets	74.83B	75.06B	67.41B	65.87B	59.01B
Cash, Cash Equivalents and Short-Term Investments	367.00M	220.00M	625.00M	209.00M	131.00M
Total Debt	34.67B	33.70B	30.03B	29.04B	25.95B
Total Liabilities	48.96B	49.21B	44.08B	43.03B	38.10B
Stockholders Equity	23.81B	23.81B	21.50B	21.03B	19.29B
Cash Flow
Free Cash Flow	-2.17B	-1.34B	-624.00M	-791.00M	-479.00M
Operating Cash Flow	4.06B	3.88B	3.54B	3.07B	2.91B
Investing Cash Flow	-5.36B	-5.39B	-3.74B	-4.06B	-3.49B
Financing Cash Flow	1.46B	1.06B	613.00M	1.03B	451.00M

Fortis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 79.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FTS, the sentiment is Positive. The current price of 79.92 is above the 20-day moving average (MA) of 77.87, above the 50-day MA of 74.22, and above the 200-day MA of 69.27, indicating a bullish trend. The MACD of 1.27 indicates Positive momentum. The RSI at 67.64 is Neutral, neither overbought nor oversold. The STOCH value of 61.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FTS.

Fortis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTS	67 Neutral	$40.55B	19.97	7.51%	3.50%	5.21%	4.27%
H	67 Neutral	C$36.04B	24.47	10.58%	2.43%	5.98%	14.79%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
EMA	65 Neutral	C$22.25B	18.58	8.83%	4.33%	14.10%	65.76%
CU	58 Neutral	C$13.29B	97.60	8.84%	4.33%	-0.94%	25.64%
ACO.X	54 Neutral	C$6.76B	42.21	3.20%	3.62%	7.75%	11.25%
AQN	50 Neutral	C$6.69B	25.55	3.88%	4.32%	-4.72%	96.98%