Springfield, Massachusetts-based Eversource Energy (ES) engages in the energy delivery business and transmits and delivers electricity and natural gas to residential, commercial, and industrial customers. Valued at a market cap of $21.3 billion, the company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and Eversource Energy fits right into that category. The utility giant serves approximately 1.8 million customers throughout Massachusetts, including almost 1.47 million electric customers in 140 communities, 639,000 gas customers in 117 communities, and 8,800 water customers in five communities.
Despite its strengths, ES is currently trading 15.2% below its 52-week high of $69.01, reached on Sep. 5. Moreover, shares of this electric services company have declined nearly 14.3% over the past three months, significantly underperforming the broader S&P 500 Index’s ($SPX) 7.4% returns during the same time frame.
Moreover, in the longer term, ES has fallen nearly 5.4% over the past 52 weeks, significantly lagging behind SPX’s 28.2% returns. On a YTD basis, shares of ES are down 5.2%, massively underperforming SPX’s almost 26.9% gains over the same time frame.
To confirm its bearish trend, ES has been trading below its 200-day moving average since early December and has remained below its 50-day moving average since late November.
Shares of ES slipped 2.1% after its Q3 earnings release on Nov. 4, despite delivering a better-than-expected performance. The company’s adjusted earnings of $1.13 per share surpassed the Wall Street estimates of $1.04 and improved 16.5% from the year-ago figure. Moreover, its revenue climbed 9.7% year-over-year to $3.06 billion and marginally exceeded the forecasted figure.
However, the company’s reported net loss of $118.1 million in Q3, primarily fueled by a $524 million after-tax loss from the divestiture of its offshore wind business, might have slightly dampened investor confidence. Furthermore, ES reduced its adjusted EPS prediction for the full year 2024 to $4.52–$4.60, noting a higher-than-expected impact of interest expenses. This may have added to its downward price movement.
ES’ underperformance becomes more evident when compared to its rival, Duke Energy Corporation (DUK), which gained nearly 11.7% over the past 52 weeks and 11.2% on a YTD basis.
Despite Eversource Energy’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 20 analysts covering it, and the mean price target of $71.44 suggests a 22.1% premium to its current levels.
