With a market cap of $22.3 billion, Springfield, Massachusetts-based Eversource Energy (ES) is a leading energy delivery company. It provides electricity, natural gas, and water services to residential, commercial, and industrial customers across Connecticut, Massachusetts, and New Hampshire.
Shares of the power provider have underperformed the broader market over the past 52 weeks. ES stock has risen 14.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 35.7%. In 2024, shares of ES are down 1.4%, compared to SPX's 25.5% gain on a YTD basis.
Looking closer, ES has also lagged behind the Utilities Select Sector SPDR Fund's (XLU) 31.5% return over the past 52 weeks and a 23.7% YTD gain.
Despite reporting better-than-expected Q3 adjusted EPS of $1.13 and revenue of $3.1 billion on Nov. 4, shares of Eversource Energy fell 2.1% the following day due to the $524 million after-tax loss from the divestiture of its offshore wind business, which outweighed the positive quarterly earnings from other segments. Investors were concerned about the narrowed 2024 adjusted EPS forecast to $4.52-$4.60, reflecting higher-than-expected interest expenses that could challenge Eversource's future profitability. Additionally, the lower-than-expected proceeds from the wind sale and increased capital expenses, despite benefiting future infrastructure, added uncertainty around short-term returns.
For the current fiscal year, ending in December, analysts expect ES' EPS to grow 5.1% year-over-year to $4.56. The company's earnings surprise history is mixed. It beat or met the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 19 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings and 10 “Holds.”
On Nov. 6, Scotiabank analyst Andrew Weisel maintained a "Hold" rating on Eversource Energy, setting a price target of $66.
As of writing, ES is trading below the mean price target of $73.73. The Street-high price target of $87 implies a potential upside of nearly 43%.
