Based in Springfield, Massachusetts, Eversource Energy (ES) is an energy delivery company involved in the transmission and distribution of electricity, solar power facilities, and natural gas. Valued at a market cap of $22.8 billion, the company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments.
Shares of this energy provider have underperformed the broader market over the past 52 weeks. ES has increased marginally over this time frame, while the broader S&P 500 Index ($SPX) has rallied 24.9%. In 2024, shares of ES are up 5.1%, compared to SPX’s 16.2% gain on a YTD basis.
Narrowing this focus, ES’s underperformance becomes more evident compared to the S&P 500 EW Utilities Invesco ETF’s (RSPU) 18.3% gain over the past 52 weeks and 15.8% returns on a YTD basis.
ES’s underperformance is due to setbacks in 2023 and 2024, including decreased earnings from the Water Distribution segment caused by higher operating and interest costs. However, despite missing revenue estimates, the stock rose 1.8% following the release of its Q2 earnings report on Jul. 31 due to a significant profit increase, driven by higher demand for electricity during the peak summer months and improved earnings in both its electric transmission and natural gas distribution segments.
For the current fiscal year, ending in December, analysts expect ES’s 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 two of the last four quarters while missing on two other occasions.
Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings and 10 “Holds.”
Overall, the configuration has remained fairly steady over the past months.
On Aug. 5, BMO Capital Markets maintained a “Market Perform” rating on Eversource Energy and raised the price target to $73, noting solid Q2 results and favorable regulatory changes in Connecticut, despite the absence of major new developments.
The mean price target of $69 represents a premium of only 6.4% to ES’s current levels. The street-high price target of $79, implies a potential upside of 21.8% from the current price
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
