Analyst Upgrade Signals Renewed Growth Prospects for This North American Utility Leader

Fortis Inc. (FTS), a prominent North American regulated electric and gas utility, has just received a significant analyst upgrade that could reshape investor expectations. Desjardins, one of Canada’s most influential investment banks, has shifted its rating from Hold to Buy on Fortis, reflecting renewed confidence in the company’s growth trajectory amid sector-wide momentum. This upgrade comes as Fortis sets a fresh 52-week high, following a robust earnings beat and a series of positive operational developments.

For investors, analyst upgrades from firms like Desjardins are more than headlines—they’re catalysts. These moves often reflect deep fundamental research and can presage further price action, especially when accompanied by improving financials and bullish sector sentiment. Here’s what you need to know about this high-conviction call on Fortis.

Key Takeaways

• Desjardins upgrades Fortis to Buy: Signals increased analyst confidence in business fundamentals.

• Stock sets new 52-week high: Fortis recently touched $50.56, its highest level in a year.

• Earnings beat expectations: Q2 2025 EPS came in at $0.55, surpassing consensus estimates.

• Recent news flow is bullish: Multiple sources highlight Fortis’s operational strength and upside potential.

• Technical momentum is strong: RSI at 78.3 and price above both 20-day EMA and upper Bollinger Band.

• Potential upside: While a specific price target was not disclosed, the upgrade and positive news flow suggest analysts see further room to run from current levels.

Desjardins’ Upgrade: A Vote of Confidence from a Canadian Powerhouse

Desjardins, a leading Canadian financial firm known for its deep sector expertise and strong institutional client base, raised its rating on Fortis from Hold to Buy on August 5, 2025. While the firm did not disclose a specific price target in this release, the upgrade alone carries substantial weight—Desjardins’ research team is renowned for its disciplined approach to the utilities sector and for influencing both retail and institutional flows across Canadian equities.

"Desjardins’ move is a clear signal of conviction, especially as it comes in the wake of Fortis’s strong operational and financial performance." Deepstreet

Fortis’s upgrade aligns with the company’s ability to execute on capital programs, deliver consistent dividend growth, and outperform earnings expectations. Analyst upgrades from firms with Desjardins’ stature often precede increased institutional interest and can mark inflection points for stocks trading near technical highs.

Fortis: Business Model and Market Positioning

Fortis operates as a holding company for regulated electric and gas utilities, with assets spanning Canada, the United States, and the Caribbean. Its business is built on long-term, rate-regulated contracts, which provide stable cash flows and support a steadily growing dividend. Fortis’s strategy centers on prudent capital investments in grid modernization, renewable energy integration, and cross-border expansion.

Key characteristics of Fortis’s operating model:

• Highly regulated asset base: >99% of earnings from regulated utilities.

• Geographic and regulatory diversification: Business units include ITC Holdings (largest independent electricity transmission operator in the U.S.), UNS Energy, Central Hudson, and several Canadian utilities.

• Capital deployment: Multi-year capital plan focused on grid resiliency and low-carbon transitions.

• Dividend track record: 51 consecutive years of dividend increases.

This model has enabled Fortis to weather economic cycles, interest rate volatility, and sector-specific disruptions, making it a core holding for income-focused and defensive investors.

Financial Performance: Q2 2025 Delivers, Backstopping Analyst Optimism

Fortis’s most recent quarter (Q2 2025) delivered:

• EPS: $0.55 (vs. $0.51 consensus, $0.49 year ago)

• Revenue: Both earnings and revenues beat expectations (Zacks)

Management attributed the beat to regulated rate base expansion, effective cost controls, and ongoing execution on capital projects. The Q2 earnings call further highlighted Fortis’s robust pipeline of growth opportunities and reaffirmed guidance for continued dividend growth.

"Our strategy remains unchanged: invest in our regulated utilities, drive rate base growth, and deliver strong, predictable returns for shareholders." — David Hutchens, CEO (Seeking Alpha)

Price Action: Technicals Signal Momentum, but Is There Still Room to Run?

• Current Price: $50.55 (pre-market, August 5, 2025)

• 52-Week High: $50.56 (set August 1, 2025)

• 52-Week Low: $40.32 (January 13, 2025)

• 20-Day EMA: $48.74 | Recent RSI: 78.3 (overbought)

Fortis’s shares have rallied strongly in 2025, with a consistent uptrend punctuated by high-volume breakouts. The stock now trades above its upper Bollinger Band—often a sign of technical strength, but also a signal for potential short-term consolidation as momentum indicators reach overbought levels.

• Sentiment Ratio: 0.54 (more up days than down)

• Average Daily Volume: 60,841 shares

Recent trading suggests growing institutional participation, with the highest volumes observed on February 14, 2025. The stock’s strong technical profile could continue to attract momentum-driven flows, especially as analyst upgrades bring the stock onto more radar screens.

Recent News Flow: Earnings Beat and Positive Headlines

1. Fortis (FTS) Hits Fresh High: Is There Still Room to Run? (Zacks, Aug 4, 2025)

   • Highlights Fortis’s strong fundamentals and technical momentum, questioning whether upside remains after a 52-week high.

2. Fortis Q2 Earnings and Revenues Beat Estimates (Zacks, Aug 1, 2025)

   • Notes both earnings and revenues exceeded consensus; underlines the company’s execution and cost discipline.

3. Q2 2025 Earnings Call Transcript (Seeking Alpha, Aug 1, 2025)

   • Provides management commentary reinforcing the stability and growth of Fortis’s regulated asset base.

Analyst Upgrade—What Does It Mean for Potential Upside?

While Desjardins has not disclosed a new price target, the move from Hold to Buy, especially at all-time highs, is a strong signal that the firm expects further upside. Analyst upgrades at technical highs often reflect confidence in the company’s ability to continue outperforming, either through further earnings beats, dividend increases, or sector tailwinds such as declining interest rates or increased infrastructure investment.

Given the current price of $50.55 and the tone of recent bullish commentary, investors should monitor for further positive revisions and potential target hikes from other analysts. With technicals in overbought territory but fundamental momentum strong, the risk/reward profile remains favorable for long-term holders seeking income and stability.

Risks and Considerations

• Valuation at highs: Investors should watch for short-term pullbacks or profit-taking as the RSI is in overbought territory.

• Interest rate sensitivity: As a utility, Fortis is sensitive to macro rate changes—declining rates could further boost the stock, while unexpected hikes might pressure valuation.

• Regulatory risk: Ongoing execution on capital programs and rate approvals is critical to maintaining growth.

Conclusion: A New Chapter for Fortis?

Desjardins’ upgrade of Fortis to Buy marks a meaningful inflection point for this North American utility leader. With earnings momentum, technical strength, and a robust, regulated business model, Fortis is well-positioned to deliver further value to shareholders. While the stock is not without risks—particularly after a run to all-time highs—the combination of strong analyst conviction, positive news flow, and sector tailwinds makes Fortis a compelling watch for investors seeking both growth and income in the utilities space.