Fortis Incorporation

Kalkine's Global Tariff Report offers independent, data-driven analysis of key global sectors impacted by tariff adjustments. It evaluates the potential implications these changes may have on equity valuations within those industries. The report prioritizes trade-sensitive sectors, which typically face increased investor scrutiny during periods of tariff uncertainty, while also identifying defensive and countercyclical segments that demonstrate resilience or potential for outperformance amidst global trade disruptions.

As illustrated in the table below, several key sectors in different countries are directly impacted by the recent tariff announcement from President Trump.

Key Developments (June 2, 2025) 

• Steel Tariff Hike: President Donald Trump announced a doubling of tariffs on steel imports from 25% to 50%, citing a need to "further secure the steel industry" in the US.
• US-China Tensions: Trump accused China of violating its trade deal with the US, though no specific breaches were detailed. USTR Jamieson Greer stated that China is "slow rolling their compliance."

United States: Legal Challenges and Strategic Shifts 

• A US Court of International Trade blocked several Trump-era tariffs, labeling their implementation method "unlawful."
• The US Court of Appeals granted a temporary administrative stay, allowing tariffs to remain in effect while legal reviews proceed.
• The Trump administration must file its response by June 9; an appeal to the Supreme Court is possible.

European Union: Responses and Negotiations 

• Proposed Tariffs on US Goods: In response to US tariffs, the European Union has proposed a 25% tariff on USD ~23.8 bn worth of US goods, targeting agricultural products and items from specific US states. Implementation has been delayed for 90 days to allow for further negotiations.
• Trade Talks and Deadlines: President Trump had threatened to impose a 50% tariff on all EU imports starting June 1, 2025. However, after discussions with European Commission President Ursula von der Leyen, he agreed to delay the tariffs until July 9, 2025, to allow for continued negotiations.
• EU's Strategic Position: The EU is pushing for a mutually beneficial deal that could include both sides moving to zero tariffs on industrial goods, and the EU buying more soybeans, arms, and liquefied natural gas as it phases out all Russian gas imports by the end of 2027.

In March 2025, Canada's merchandise trade deficit significantly narrowed to CAD ~506 mn (from CAD ~1.4 bn in February) as exports decreased by ~0.2% and imports fell by ~1.5%. Despite new US tariffs, a ~6.6% drop in exports to the US was largely offset by a robust 24.8% surge in exports to other countries (e.g., UK, Netherlands, Hong Kong, Germany). While overall exports declined, motor vehicle and parts exports rose. Trade in metal products was influenced by new steel and aluminum tariffs, though the overall decrease was largely due to lower gold, silver, and platinum exports. Consequently, Canada's trade surplus with the US narrowed to CAD ~8.4 bn, while the deficit with non-US countries significantly decreased to CAD ~9.0 bn.

Image source: © 2025 Krish Capital Pty. Ltd., Data Source: Canada Statistics, Analysis: Kalkine Group 

Amid elevated Market Volatility and Tariff pressures, Fortis Inc. (TSX: FTS) stands out as our defensive pick within the Utility sector, supported by rigorous fundamental and technical research

Kalkine’s Global Tariff Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on Fortis Inc. (TSX: FTS) 

Section1: Company Overview and Fundamental Insights:

Fortis Incorporation (TSX: FTS) 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. 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. 

Kalkine’s Global Tariff Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

The top 10 shareholders together form ~24.46% of the total shareholding. Fidelity Investments Canada ULC and The Vanguard Group, Inc. hold a maximum stake in the company at ~4.46% and ~4.35%, respectively.

The company reported rising financials in Q1 2025, where it clocked healthy growth under its Revenue and Net Earnings, which is a key positive. Furthermore, it witnessed industry beating margins and elevated Cash Flows from Operating Activities, displaying its strength and adaptability.

Section 2: Business Updates and Financial Highlights

The picture below gives an overview of the company’s recent activities, such as an announcement regarding Capital Expenditure and Strategic Capital Allocation.

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary

The stock has witnessed an upside of ~1.07% and ~5.69% over the last 1 week and 3 months respectively. Moreover, the stock is trading above the average 52-week high price of CAD 69.24 and 52-week low price of CAD 52.19, providing an opportunity to ride the trend.

Valuation Methodology: EV to Sales 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 May 30, 2025. 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.

Note 4: Dividend Yield may vary as per the stock price movement. 

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

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.