Shares of Fortis (FTS) have been strong performers lately, with the stock up 5.2% over the past month. The stock hit a new 52-week high of $50.56 in the previous session. Fortis has gained 20% since the start of the year compared to the 11.8% move for the Zacks Utilities sector and the 12.4% return for the Zacks Utility - Electric Power industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 1, 2025, Fortis reported EPS of $0.55 versus consensus estimate of $0.51 while it beat the consensus revenue estimate by 0.99%.
For the current fiscal year, Fortis is expected to post earnings of $2.49 per share on $9.02 in revenues. This represents a 4.18% change in EPS on a 7.36% change in revenues. For the next fiscal year, the company is expected to earn $2.58 per share on $9.34 in revenues. This represents a year-over-year change of 3.77% and 3.57%, respectively.
Valuation Metrics
While Fortis has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Fortis has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.9X. On a trailing cash flow basis, the stock currently trades at 9.6X versus its peer group's average of 8.1X. Additionally, the stock has a PEG ratio of 3.91. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Fortis currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Fortis meets the list of requirements. Thus, it seems as though Fortis shares could have a bit more room to run in the near term.
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Fortis (FTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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