Fortis (FTS – Research Report), the Utilities sector company, was revisited by a Wall Street analyst today. Analyst Benjamin Pham from BMO Capital maintained a Hold rating on the stock and has a C$69.00 price target.
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Benjamin Pham has given his Hold rating due to a combination of factors related to Fortis’s strategic plans and market position. The company’s confidence in executing its substantial five-year capital expenditure plan, which supports a 6.5% compound annual growth rate in its rate base, is a significant consideration. This growth is underpinned by Fortis’s nearly entirely regulated utility operations, which provide a stable and defensive investment profile.
Furthermore, Fortis’s ongoing regulatory initiatives, such as the proposed rate adjustments in Arizona, aim to reduce regulatory lag and enhance earnings predictability. However, despite these positive aspects, the valuation of Fortis’s stock is a key reason for maintaining a Hold rating, as it is considered fairly valued at the current price levels. The company’s focus on organic growth and execution, with mergers and acquisitions not being a priority, also plays into this assessment. Overall, while Fortis’s asset base and dividend growth guidance are attractive, the current market valuation suggests a more cautious approach.
Based on the recent corporate insider activity of 93 insiders, corporate insider sentiment is neutral on the stock.