Eversource Energy Faces Challenges Amid Strong Q3 Results
Eversource Energy (ES), a major utility provider based in Hartford, Connecticut, and Boston, Massachusetts, boasts a market cap of $21.8 billion. It is the region’s largest energy supplier, serving around 4.4 million customers across Connecticut, Massachusetts, and New Hampshire, with services in electricity, natural gas, and water.
Stock Performance Under Pressure
Despite its size, ES shares have not kept pace with the broader market over the last year. The stock has risen by 10.5%, while the S&P 500 Index ($SPX) has seen a more robust increase of 20.6%. Year-to-date, in 2025, ES shares gained 3.5%, again outperforming SPX’s 2.5% increase.
Utilities Sector Comparison
When compared to the Utilities Select Sector SPDR Fund (XLU), which yielded a 29.2% return over the same period, ES’s performance seems lackluster.
Strong Earnings, But Challenges Ahead
On November 4, Eversource Energy released its Q3 earnings, reporting an adjusted EPS of $1.13 and revenue of $3.1 billion, both exceeding expectations. Following this announcement, ES shares dropped 2.1% in the next trading session, primarily due to a $524 million after-tax loss related to the sale of its offshore wind business. This overshadowed positive earnings from its other operations. Furthermore, the company adjusted its 2024 EPS forecast to between $4.52 and $4.60, citing higher interest expenses that could affect profitability.
Market Expectations for Earnings Release
Looking ahead to its fiscal 2024 earnings release forecasted for tomorrow, analysts are predicting a 5.1% year-over-year growth in EPS to $4.56. Eversource’s earnings history shows mixed results: it has beaten or met consensus estimates in three of the last four quarters.
Analysts’ Consensus Ratings
Among the 20 analysts tracking Eversource Energy, the consensus rating stands at “Moderate Buy.” This assessment comprises nine “Strong Buy” ratings, nine “Holds,” one “Moderate Sell,” and one “Strong Sell.”
Jefferies Adjusts Price Target
On January 28, Jefferies Financial Group Inc. (JEF) revised Eversource Energy’s price target down from $52 to $47, maintaining an “Underperform” rating. The analyst highlighted a recent selloff in power, utility, and technology stocks, which raised doubts about the ongoing data center boom. Jefferies favors integrated utilities over those focused on transmission and distribution, urging a focus on lower-risk stocks with more balanced risk-reward potential.
Potential for Upside
Currently, the average price target for ES stands at $69.38, suggesting a potential upside of 16.8% from its current price. The highest target of $87 indicates a significant premium of 46.4%.
On the date of publication, Kritika Sarmah 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.
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