Hydro One Limited（H.CN）In Line. 2Q'24 Adj. EPS C$0.49 vs. C$0.49 Cons/ C$0.48 UBSe

Investment Rating - The report assigns a 12-month rating of Neutral to Hydro One Limited with a price target of C$42.00 [1][13]. Core Insights - Hydro One Limited reported an adjusted EPS of C$0.49 for Q2'24, matching consensus expectations and showing a 2.0% increase from C$0.48 in Q2'23 [1]. - The company's performance was driven by higher rates and peak demand, offset by taxes, depreciation and amortization, and asset removal costs [1]. - Hydro One has filed for approval to construct the St. Clair Transmission Line Project, expected to cost C$472 million and be operational by 2028 [1]. Financial Metrics - The market capitalization of Hydro One is C$26.5 billion (US$19.4 billion) with 598 million shares outstanding [1]. - Revenue projections show an increase from C$7,225 million in 2021 to an estimated C$8,135 million in 2024 [1]. - The net earnings forecast for 2024 is C$1,154 million, with an EPS of C$1.92 [1]. Valuation and Returns - The report indicates a forecast price appreciation of -5.3% and a forecast dividend yield of 2.8%, leading to an expected stock return of -2.5% [2]. - The price target reflects a 24% premium to the average Utility P/E of 19.3x based on the 2026E EPS of C$2.18 [4]. Industry Outlook - The industry structure and regulatory environment facing Hydro One are rated as stable, with a score of 3 on a scale of 1 to 5 [6]. - The consensus EPS forecast is expected to remain in line with previous estimates, indicating no significant surprises anticipated [6].