Q: May I please have your thoughts on their most recent quarter. My RBC discount brokerage describes them as being overvalued with a rate of return estimate of -17%. How do you view their current valuation?
5i Research Answer:
Q4 EPS slightly beat estimates of $0.71, coming in at $0.72. Revenue missed forecasts of $3.02B, coming $2.91B. FTS reaffirmed its $25.0B capital spend over 2024-2028, underpinning a five-year rate base CAGR of ~6.3% and annual dividend growth guidance of 4-6% through 2028. Valuation at 16.9x forward-earnings is decent and growth over the next two years is forecasted to be small but steady. Q4 seems fine for FTS, with nothing major reported outside of the five-year plan which also remained unchanged which was a positive.