H:TSXHydro One Limited Analysis
Data as of 2026-06-20 - not real-time
CA$56.00
Latest Price
3/10Risk
Risk Level: Low
Executive Summary
Hydro One trades at $56, which is slightly below the 20‑day SMA of 57.05 but above the 200‑day SMA of 54.80, indicating a neutral technical stance. The RSI of 39.8 points to modest oversold conditions, while the MACD histogram has just turned positive (0.0032) and volume is on an increasing trend, suggesting short‑term buying pressure. The stock’s beta of -0.25 underscores its defensive nature in a utilities sector.
Fundamentally, the company delivers 10% revenue growth and respectable margins (gross ~36%, operating ~23%), yet carries a heavy debt load (debt‑to‑equity ~148) and negative free cash flow. The DCF‑derived fair value of $28.5 is far below the current price, flagging the stock as overvalued. No dividend is paid, and recent leadership changes along with a proposed 55‑km transmission project introduce both growth potential and medium regulatory risk.
Fundamentally, the company delivers 10% revenue growth and respectable margins (gross ~36%, operating ~23%), yet carries a heavy debt load (debt‑to‑equity ~148) and negative free cash flow. The DCF‑derived fair value of $28.5 is far below the current price, flagging the stock as overvalued. No dividend is paid, and recent leadership changes along with a proposed 55‑km transmission project introduce both growth potential and medium regulatory risk.
Market Outlook
Short Term
< 1 yearPositive
Model confidence: 7/10
Key Factors
- RSI near oversold levels indicating potential rebound
- MACD histogram turning positive with bullish signal
- Increasing volume supporting short‑term momentum
Medium Term
1–3 yearsNeutral
Model confidence: 6/10
Key Factors
- Significant debt burden and negative free cash flow
- Current price far above DCF fair value
- Stable but regulated revenue base limiting upside
Long Term
> 3 yearsNeutral
Model confidence: 5/10
Key Factors
- Regulated utility model providing predictable cash flows
- Leadership transition and new transmission project offering growth upside
- High leverage and lack of dividend reducing total return potential
Key Metrics & Analysis
Financial Health
Revenue Growth10.00%
Profit Margin14.78%
P/E Ratio24.6
ROE10.92%
ROA3.69%
Debt/Equity147.79
P/B Ratio2.6
Op. Cash FlowCA$2.6B
Free Cash FlowCA$-1412875008
Industry P/E20.6
Technical Analysis
TrendNeutral
RSI39.8
SupportCA$55.21
ResistanceCA$59.95
MA 20CA$57.05
MA 50CA$57.85
MA 200CA$54.80
MACDBullish
VolumeIncreasing
Fear & Greed Index91.46
Valuation
Fair ValueCA$28.54
Target PriceCA$57.29
Upside/Downside2.30%
GradeOvervalued
TypeValue
Risk Assessment
Beta-0.25
Volatility15.21%
Sector RiskLow
Reg. RiskMedium
Geo RiskLow
Currency RiskLow
Liquidity RiskLow
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This analysis may contain inaccuracies and is provided for informational and research purposes only. It is not personal investment advice, a recommendation, or an instruction to buy, sell, or hold any asset.