Fortis (FTS) AI Stock Analysis

• Market Cap: $40.17B
• Dividend Yield: 3.5%
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.15
• 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: 2,222,642
• 30 Day Avg. Volume: 2,180,257
• 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: 6.12
• Enterprise Value/Gross Profit: 16.48
• Enterprise Value/Ebitda: 12.65
• 1Y Price Target: $75.59
• Price Target Upside: -4.51% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 3.62
• Revenue Forecast (FY): $13.29B

• Rating: 64 Neutral
• Price Target: C$83.00 ▲(4.85% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily held back by persistently negative free cash flow and elevated leverage despite steady regulated earnings growth. Technicals are supportive with a clear uptrend, though momentum looks overbought. Valuation is somewhat demanding for a utility, while the earnings call provided solid growth/dividend guidance and a supportive capital plan, tempered by regulatory and financing-cost headwinds.

Positive Factors

Regulated revenue model

Fortis’s cost-of-service, regulated utility model creates durable cash-flow predictability and allowed returns tied to rate base. This structural framework limits revenue cyclicality, supports long-term capital recovery, and underpins reliable earnings visibility for 2–6+ months horizons.

Steady revenue and margins

Multi-year top-line and net income expansion with stable mid-teens margins indicates operational and regulatory stability. Consistent revenue and profit trends support predictable cash generation from core distribution businesses and provide a durable earnings base to fund ongoing infrastructure investments.

Large capital plan driving rate-base growth

A $28.8B capital program materially increases regulated rate base, creating predictable long-term regulated returns and supporting the company’s guidance for 4–6% annual dividend growth. Such sustained investment drives structural earnings and cash-flow expansion over multiple years.

Negative Factors

Persistent negative free cash flow

Chronic negative FCF reflects heavy capex and growth funding needs, requiring ongoing external financing. Over time this increases refinancing and interest-rate exposure, constrains financial flexibility, and raises the risk that capital structure or payout policies must adjust if funding conditions tighten.

Elevated and rising leverage

Rising indebtedness despite equity growth leaves leverage elevated versus history, reducing cushion for rate or margin shocks. High leverage increases sensitivity to higher financing costs, limits capacity for opportunistic investments, and can pressure ratings and borrowing terms over a multi-quarter horizon.

Regulatory lag and higher financing costs

Regulatory timing mismatches delay recovery of invested capital, creating earnings volatility and deferred cash recoveries. Combined with increased holding-company finance costs, this structurally reduces distributable cash and raises execution risk for dividend and investment plans during periods of elevated rates.

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 generates revenue primarily through the provision of regulated utility services, which include the transmission and distribution of electricity and natural gas. The company's revenue model is largely based on a cost-of-service approach, where it earns a regulated return on invested capital. Key revenue streams include residential, commercial, and industrial electricity sales, as well as natural gas distribution services. Fortis also benefits from long-term contracts and regulatory frameworks that ensure stable cash flows. Additionally, the company invests in infrastructure upgrades and renewable energy projects, which can enhance its revenue potential over time. Strategic partnerships with local governments and other utility providers further contribute to its earnings, enabling Fortis to expand its service offerings and improve operational efficiencies.

Fortis Financial Statement Overview

Summary

Income statement strength (Score 74) reflects steady multi-year revenue and net income growth with stable regulated-utility margins. Offsetting this, the balance sheet shows elevated and rising leverage (Score 62), and cash flow is the key drag: free cash flow is negative every year (Score 48), implying ongoing reliance on external funding to support heavy capex.

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: 79.16
• 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 79.16 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
H	67 Neutral	C$35.56B	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$21.97B	18.58	8.83%	4.33%	14.10%	65.76%
FTS	64 Neutral	$40.17B	19.97	7.51%	3.50%	5.21%	4.27%
CU	58 Neutral	C$13.19B	97.60	8.84%	4.33%	-0.94%	25.64%
ACO.X	54 Neutral	C$6.70B	42.21	3.20%	3.62%	7.75%	11.25%
AQN	50 Neutral	C$6.60B	25.55	-0.57%	4.32%	-4.72%	96.98%

Fortis Corporate Events

Fortis Inc. Declares First Quarter Dividends for 2026

Fortis Inc. announced its first-quarter dividends for 2026, with payments scheduled for March 1, 2026, to shareholders of record as of February 17, 2026. The declared dividends include various amounts for different series of preference shares and $0.64 per share on common shares, all designated as eligible for federal and provincial dividend tax credits. This announcement reflects Fortis’ ongoing commitment to providing shareholder value and maintaining its strong position in the utility sector.

The most recent analyst rating on (TSE:FTS) stock is a Hold with a C$79.00 price target. To see the full list of analyst forecasts on Fortis stock, see the TSE:FTS Stock Forecast page.