Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

Fortis Inc. (TSX: FTS) Fortis owns and operates 10 utility transmission and distribution assets in Canada and the United States, serving more than 3.4 million electricity and gas customers. The company has smaller stakes in electricity generation and several Caribbean utilities. Subsidiary ITC operates electric transmission in seven U.S. states, with more than 16,000 miles of high-voltage transmission lines in operation serving a peak load in excess of 23 gigawatts.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~25.14% of the total shareholding. The Vanguard Group, Inc.  and RBC Dominion Securities, Inc. hold a maximum stake in the company at ~­­­3.73% and ~3.21%, respectively.

1.4 Key Metrics:

The company reported significant growth in its core financials, where revenue increased by about 16.9% in FY 2022 compared FY 2021, and net earnings increased by around 7.8%, which is a substantial positive. Earnings from the company's operational segments also witnessed an uptrend in the same reported period compared to the previous equivalent period. Furthermore, industry beating margins and elevated cash from operations illustrated the group's strength and adaptability.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, such as announcement regarding electric vehicle smart charging pilot and dividend distribution.

2.2 Insights on FY 2022 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed a downside of ~1.47% and ~10.19% over the last 1 month and 3 months respectively. Moreover, the stock is trading below the average of 52-week high price of CAD 65.26 and 52-week low price of CAD 48.45 providing an opportunity to accumulate the stock.

4.2 Fundamental Valuation

Valuation Methodology: EV to Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 10, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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Disclaimer

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