Eversource Energy
ES
$69.49
-0.50%
Eversource Energy is a diversified utility holding company whose subsidiaries deliver rate-regulated electricity and natural gas distribution service to more than 4 million customers across the Northeast US, operating primarily in the Regulated Electric industry with additional transmission and legacy water operations. As one of New England's dominant transmission and distribution franchises, Eversource is a classic regulated-returns compounder rather than a growth disruptor, with earnings driven by rate-base expansion, allowed returns, and capital investment programs approved by state regulators. The current investor narrative centers on the company's strategic simplification — exiting offshore wind through the 2024 termination of its Orsted partnership and completing the Aquarion water sale in 2026 — alongside a Q3 2026 earnings miss with year-over-year revenue decline that has revived debate over cost recovery, storm-related expenses, and the pace of rate-base growth. Sentiment is further complicated by a mixed analyst stance, with several firms trimming to Hold or Underperform ratings during 2026, even as management raised guidance and the stock has rebounded sharply off its autumn lows.…
ES
Eversource Energy
$69.49
Investment Opinion: Should I buy ES Today?
Rating: Hold. Eversource is a fairly valued, defensive regulated utility whose 4.41% dividend yield and 0.663 beta make it a reasonable income/ballast holding, but with the stock at $69.84 against a $72.00 average analyst target (just 3.1% implied upside) and a consensus recommendation mean of 2.71, there is no compelling margin of safety to justify new aggressive buying today. The core thesis is that the autumn selloff to $62.72 already discounted much of the Q3 2026 earnings miss, and the 7.05% one-month rebound (12.04 points ahead of SPY's -4.99%) reflects that, but the company still must prove the miss was weather/storm-driven rather than structural.
Supporting evidence is mixed but leans toward fair value rather than bargain: the stock trades at 14.77x trailing and 14.18x forward earnings with a 1.54x price-to-book, in line with or slightly below the regulated electric peer group and below its own 2021-2022 book multiples of 1.9x-2.1x. Revenue growth is anemic at 2.29% year over year in Q2 2026 ($2.903 billion vs. $2.838 billion) and turned negative in Q3 2026, while profitability is thin and volatile — Q2 2026 net margin of 1.85% versus 13.47% in Q1 2026, with TTM net margin of 12.49% and ROE of 10.45%. Free cash flow is the weak link: TTM FCF of just $297.7 million on a $25.0 billion market cap (1.1% FCF yield) against quarterly capex above $1 billion, and debt-to-equity of 1.87x with a 0.65 current ratio. The 4.41% yield is covered by a 65.0% payout ratio, and the $2.33 billion Aquarion sale lifted cash to $1.894 billion, providing a liquidity buffer.
The biggest risks that could invalidate a Hold are: (1) an adverse rate-case outcome that caps allowed returns and compresses EPS toward the $5.57 low end of the forward range; (2) continued interest-cost escalation (interest expense rose from $293 million in Q2 2025 to $355 million in Q2 2026) against thin ~1.83x coverage; and (3) a break below the $62.72 52-week low, which would reopen downside toward the $49.00 analyst low target (~30% below current). This Hold would upgrade to Buy if the stock retests the low-$60s with stable margins and a favorable rate-case ruling, or if the forward PE compresses below ~13x; it would downgrade to Sell if Q4 results confirm a second consecutive revenue decline or if free cash flow turns negative. Verdict: fairly valued relative to history and peers — not overvalued, but not the discount that would justify a Buy.
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ES 12-Month Price Forecast
Eversource screens as a fairly valued defensive utility rather than a compelling opportunity: the 14.18x forward PE and 1.54x book sit at the middle-to-lower end of its historical range, but that discount fairly compensates for leverage (1.87x debt-to-equity, 0.65 current ratio) and thin free cash flow. The 4.41% yield and 0.663 beta make it useful portfolio ballast, and the 7.05% one-month rebound (12.04 points ahead of SPY) suggests the worst of the autumn selloff is priced in. However, the Q3 2026 earnings miss with a year-over-year revenue decline, plus 2026 downgrades from Argus and Seaport Global and a 2.71 recommendation mean, keep conviction low, and the $72.00 average target leaves only ~3.1% upside. I would upgrade to bullish on a favorable rate-case ruling plus confirmation that Q4 revenue has stabilized, and downgrade to bearish if the stock breaks below $62.72 or free cash flow turns negative.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Eversource Energy's 12-month outlook, with a consensus price target around $72.00 and implied upside of +3.6% versus the current price.
Average Target
$72.00
17 analysts
Implied Upside
+3.6%
vs. current price
Analyst Count
17
covering this stock
Price Range
$49 - $85
Analyst target range
Coverage is moderate with 14 analysts, and the distribution is cautious: 5 Buy, 9 Hold, and 3 Sell, yielding a consensus recommendation of Hold and a recommendation mean of 2.71 (where 3.0 is a pure Hold). The average target price of $72.00 implies roughly 3.1% upside from the current $69.84, a thin margin that confirms the neutral-to-bearish tilt; the consensus is clearly not bullish, and the recent ratings flow supports that — Argus downgraded from Buy to Hold in June 2026, Seaport Global moved from Buy to Neutral in April 2026, and JP Morgan maintained an Underweight in October 2026, while Wells Fargo has held Overweight throughout.
The target range is wide, from $49.00 to $85.00 — a 73% spread that signals genuine disagreement about the company's trajectory. The $85 high target implies roughly 21.7% upside and would require either multiple expansion toward the upper end of the historical book-value band or successful resolution of rate cases and cost recovery that restores earnings growth; the $49 low target implies about 30% downside and prices in margin compression, adverse regulatory outcomes, or rising financing costs on the leveraged balance sheet. This dispersion, combined with the 3 Sell ratings and the Hold consensus, indicates low conviction among analysts; the estimated EPS range of $5.57 to $6.58 for the forward year is similarly wide, and with the stock trading near the consensus target, the risk/reward is roughly balanced pending clearer evidence that the Q3 earnings miss was a temporary setback rather than the start of a deteriorating trend.
Bulls vs Bears: ES Investment Factors
The bear case currently carries slightly stronger evidence: the Q3 2026 earnings miss with a year-over-year revenue decline, a 1.85% quarterly net margin, 1.87x debt-to-equity, and a Hold consensus with only 3.1% implied upside all point to a stock priced roughly at fair value with limited near-term catalysts. The bull case rests on valuation support (14.8x PE, 1.54x book), a 4.41% dividend yield, a 0.663 beta, and a sharp 7.05% one-month recovery that has outperformed the S&P 500 by 12.04 points, suggesting the worst of the autumn selloff may be priced in. The single most important tension is whether the Q3 miss was a temporary, storm-and-weather-driven setback or the start of a deteriorating trend in cost recovery and rate-base growth — resolution of that question, likely via the next rate case outcomes and Q4 results, would move the thesis more than any other factor. Analyst dispersion ($49 to $85 targets, $5.57 to $6.58 forward EPS) confirms that even the professional community cannot yet resolve this tension, which is why the risk/reward is roughly balanced rather than compelling in either direction.
Bullish
- Valuation sits at fair-to-discounted levels: At 14.77x trailing and 14.18x forward earnings, with a 1.54x price-to-book, ES trades at or slightly below the typical regulated electric peer group and well under its own 2021-2022 book multiples of 1.9x-2.1x. The 10.04x EV/EBITDA is a reasonable multiple for a transmission-and-distribution franchise with stable regulated cash flows, so the market is not pricing in optimistic expectations.
- Dividend yield offers meaningful income cushion: The 4.41% dividend yield is well above the sector average and is covered by a 65.0% payout ratio, leaving room for the payout to be sustained even in a weak earnings quarter. For income-oriented investors, that yield provides roughly two-thirds of the total-return case independent of multiple expansion.
- Momentum has decisively turned positive: The stock has gained 7.05% over the past month and 5.01% over six months, outperforming the S&P 500 by 12.04 percentage points over the past month (versus SPY's -4.99%). At $69.84 it sits roughly 91.2% of the way through its 52-week range of $62.72 to $76.57, signaling buyers are defending the low-$60s.
- Portfolio simplification reduces risk: The 2024 exit from the Orsted offshore wind partnership and the completed 2026 Aquarion water sale ($2.33 billion in proceeds, lifting cash to $1.894 billion) concentrate the business in regulated electric distribution ($2.194 billion) and transmission ($614 million). This is a cleaner, lower-risk profile with fewer unregulated earnings surprises.
Bearish
- Q3 2026 earnings miss with revenue decline: The most recent quarter showed an outright year-over-year revenue decline and an earnings miss, following Q2 2026 revenue growth of just 2.29% ($2.903 billion vs. $2.838 billion). Broad-based segment weakness in the Q3 report revives questions about whether cost recovery and rate-base growth are keeping pace with expenses.
- Leverage and thin free cash flow: Debt-to-equity of 1.87x, total debt-to-capitalization of 64.6%, and a current ratio of just 0.65 mean current liabilities substantially exceed current assets. TTM free cash flow of only $297.7 million against a $26.2 billion market cap is a 1.1% FCF yield, while capex runs above $1 billion per quarter ($1.014 billion in Q2 2026), forcing reliance on external financing.
- Earnings volatility and margin compression: Q2 2026 net income was just $53.7 million on $2.903 billion of revenue (1.85% net margin) versus $606.8 million and a 13.47% margin in Q1 2026, driven by $355 million of interest expense and a $517 million negative other-income line. Gross margin fell to 32.05% from 54.68% a year earlier, and Q3 2024 produced a $118 million loss, underscoring sensitivity to one-time items.
- Cautious analyst consensus with low conviction: Of 14 analysts, 9 rate Hold and 3 rate Sell against only 5 Buys, yielding a recommendation mean of 2.71 and a Hold consensus. The $72.00 average target implies just 3.1% upside from $69.84, and the $49.00-to-$85.00 range is a 73% spread that signals genuine disagreement about the trajectory.
ES Technical Analysis
Eversource is in a recovery phase within a broader range-bound structure, with the stock down 2.38% over the trailing year but up 2.62% year-to-date, a divergence that reflects a weak second half offset by a strong recent bounce. At $69.84, the shares sit roughly 91.2% of the way through the 52-week range of $62.72 to $76.57, positioning them in the upper portion of the band but still about 8.8% below the high — a zone that suggests improving momentum rather than overextension. The 16.97% maximum drawdown over the period confirms the stock endured a meaningful correction before stabilizing, and the current recovery is being driven by buyers defending the low-$60s.
Short-term momentum is decisively positive and diverging from the longer-term trend: the stock has gained 7.05% over the past month and 5.01% over six months, yet remains down 3.44% over three months and 2.38% over a year. This pattern — a sharp one-month surge against a negative 12-month print — signals a potential trend reversal or mean-reversion rally off oversold conditions rather than a simple continuation. The relative strength data reinforces the shift: ES outperformed the S&P 500 by 12.04 percentage points over the past month (versus SPY's -4.99%) and by 5.55 points over six months, though it still lags the index by 11.97 points over a full year. Volume of roughly 3.42 million shares is moderate for a $25 billion utility, and the 4.01 short ratio indicates short sellers are not aggressively pressing the name.
Key technical levels are well defined: support rests at the 52-week low of $62.72, roughly 10.2% below the current price, while resistance sits at the 52-week high of $76.57, about 9.6% above. A breakout above $76.57 would confirm the reversal and likely draw momentum buyers, whereas a breakdown below $62.72 would signal the recovery has failed and reopen the downside. The stock's beta of 0.663 is a critical risk-management input — ES is roughly 34% less volatile than the market, meaning its 7.05% monthly move represents a larger relative swing than the raw number implies, and position sizing should account for this defensive, low-beta profile that typically underperforms in strong risk-on rallies but holds up better in selloffs.
Beta
0.66
0.66x market volatility
Max Drawdown
-17.0%
Largest decline past year
52-Week Range
$63-$77
Price range past year
Annual Return
-4.9%
Cumulative gain past year
| Period | ES Return | S&P 500 |
|---|---|---|
| 1m | +5.7% | -3.3% |
| 3m | -2.3% | -2.3% |
| 6m | +1.8% | +1.4% |
| 1y | -4.9% | +12.2% |
| ytd | +2.1% | +10.4% |
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ES Fundamental Analysis
Revenue growth is modest and uneven: Q2 2026 revenue of $2.903 billion grew just 2.29% year over year against $2.838 billion in Q2 2025, and the most recent Q3 2026 report showed an outright year-over-year decline. The multi-quarter pattern is choppy — Q1 2026 revenue of $4.504 billion rose from $4.118 billion a year earlier, but Q4 2025's $3.370 billion exceeded Q4 2024's $2.971 billion largely on rate increases rather than volume. Segment data shows Electric Distribution at $2.194 billion and Electric Transmission at $614 million dominate the mix, with Natural Gas Distribution at $573 million and Water at just $67 million; the pending Aquarion divestiture will further concentrate the business in regulated electric, which is a cleaner but slower-growth profile.
Profitability is thin but positive, and highly seasonal: Q2 2026 net income was just $53.7 million on $2.903 billion of revenue, a 1.85% net margin, versus $606.8 million and a 13.47% margin in Q1 2026 — a swing driven by weather, interest expense of $355 million, and a $517 million negative other-income line. Gross margin in Q2 2026 was 32.05%, down from 54.68% in Q2 2025, though the prior-year figure reflects a different cost-of-revenue presentation; the trailing gross margin of 30.13% and operating margin of 22.06% are consistent with regulated utility economics. The TTM net margin of 12.49% and ROE of 10.45% are respectable for the sector, but the quarterly volatility — including a Q3 2024 loss of $118 million — underscores how sensitive earnings are to one-time items and regulatory outcomes.
Balance sheet leverage is the key risk: debt-to-equity stands at 1.87x, total debt-to-capitalization at 64.6%, and the current ratio is a weak 0.65, meaning current liabilities substantially exceed current assets. Free cash flow TTM is only $297.7 million against a $26.2 billion market cap — a thin 1.1% FCF yield — and capital expenditures are running above $1 billion per quarter ($1.014 billion in Q2 2026), so the company depends on external financing to fund its rate-base investment program. Interest coverage of roughly 1.83x on the latest quarterly data is tight, and the 4.41% dividend yield consumes a 65.0% payout ratio, leaving limited cushion; the Q2 2026 $2.33 billion in acquisition proceeds from the Aquarion sale provided welcome liquidity, lifting cash to $1.894 billion, but the structural reliance on debt markets remains the central balance-sheet concern.
Quarterly Revenue
$2.9B
2026-06
Revenue YoY Growth
+2.3%
YoY Comparison
Gross Margin
32.0%
Latest Quarter
Free Cash Flow
$297711000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ES Overvalued?
Because Eversource is profitable (TTM net income positive, EPS of $0.07 on a quarterly basis but $5.89 estimated for the forward year), the PE ratio is the appropriate primary metric. The stock trades at 14.77x trailing earnings and 14.18x forward earnings, a modest 4% compression that implies the market expects only modest earnings growth — consistent with a regulated utility whose returns are set by rate cases rather than operating leverage. The PEG ratio of 0.146 is unusually low and reflects the depressed trailing earnings base rather than genuine deep-value growth, so it should be treated with caution.
Against utility-sector norms, the valuation looks reasonable rather than stretched: a 14.8x trailing PE and 1.54x price-to-book are in line with or slightly below the typical regulated electric peer group, while the 1.84x price-to-sales and 3.96x EV-to-sales reflect the capital-intensive, low-margin nature of the business. The 10.04x EV/EBITDA is a fair multiple for a transmission-and-distribution utility with stable regulated cash flows, and the 4.41% dividend yield is well above the sector average, providing a meaningful income cushion. The premium-versus-discount question is largely moot here — ES is priced as an average regulated utility, and its 10.45% ROE and 12.49% net margin justify a market-weight multiple rather than a premium one.
Historically, ES has traded in a wide PE band, from roughly 9.9x in Q1 2024 to over 129x in Q2 2026 when quarterly earnings collapsed, with price-to-book ranging from about 1.35x to 2.15x over the past five years. At 1.54x book and 14.8x trailing earnings, the stock sits near the middle-to-lower end of its own historical range — below the 1.9x-2.1x book multiples seen in 2021-2022 — suggesting the market is not pricing in optimistic expectations. That said, the depressed multiple partly reflects genuine fundamental deterioration in interest coverage and free cash flow, so the discount is better read as fair compensation for leverage risk than as an obvious value opportunity.
PE
14.8x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 10x~26x
vs. Industry Avg
19.0x
Industry PE ~19.0x*
EV/EBITDA
10.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on the leveraged balance sheet and thin cash generation. Debt-to-equity of 1.87x and total debt-to-capitalization of 64.6% mean the company is structurally dependent on debt markets, while a current ratio of 0.65 indicates current liabilities substantially exceed current assets. TTM free cash flow of only $297.7 million against quarterly capex above $1 billion ($1.014 billion in Q2 2026) means the rate-base investment program must be externally financed, and interest coverage of roughly 1.83x leaves little buffer if borrowing costs rise or a rate case disappoints. Earnings are also highly seasonal and item-sensitive: Q2 2026 net income of $53.7 million (1.85% margin) followed Q1 2026's $606.8 million (13.47% margin), with a $517 million negative other-income line and $355 million of interest expense driving the swing, and Q3 2024 produced a $118 million loss.
Market and competitive risks are dominated by valuation compression and regulatory/rate-case outcomes rather than classic competitive disruption, since ES operates regulated franchises serving more than 4 million customers. At 14.77x trailing and 14.18x forward earnings with a 1.54x price-to-book, the stock is priced as an average regulated utility — but that multiple can compress toward the 9.9x low seen in Q1 2024 if earnings quality deteriorates, and the 73% spread in analyst targets ($49 to $85) shows how wide the range of outcomes is perceived to be. The beta of 0.663 means ES is roughly 34% less volatile than the market, so it will likely lag in strong risk-on rallies (it trails the S&P 500 by 11.97 points over one year) while holding up better in selloffs; sector rotation away from defensives is a real drag. Recent news of the Q3 2026 earnings miss with broad-based segment weakness, alongside 2026 downgrades from Argus (Buy to Hold), Seaport Global (Buy to Neutral), and JP Morgan's maintained Underweight, highlights emerging skepticism about cost recovery and storm-related expenses.
The worst-case scenario is a chain in which an adverse rate-case outcome limits allowed returns, storm and interest costs continue to outrun recovery, and the company is forced to issue equity or debt at unfavorable terms to fund capex — compressing EPS toward the low end of the $5.57-to-$6.58 forward range and pushing the multiple toward its historical trough. In that scenario, the stock would likely retest the 52-week low of $62.72, roughly 10.2% below the current $69.84, and a break below that level would signal the recovery has failed and reopen further downside toward the $49.00 analyst low target — about 30% below the current price. The 16.97% maximum drawdown over the trailing period is a realistic guide to a moderate adverse outcome, while a full bear case combining regulatory disappointment with multiple compression could produce losses in the 30% range from today's level.
FAQ
The most severe risk is financial leverage: debt-to-equity of 1.87x, total debt-to-capitalization of 64.6%, and a current ratio of just 0.65 mean the company depends on external financing, while TTM free cash flow of only $297.7 million against capex above $1 billion per quarter ($1.014 billion in Q2 2026) leaves little self-funding capacity. Second is regulatory and earnings risk — an adverse rate-case outcome capping allowed ROE or disallowing storm-cost recovery could compress EPS toward the $5.57 low end of the forward range, and earnings are already volatile (Q2 2026 net margin of 1.85% versus 13.47% in Q1 2026, and a $118 million loss in Q3 2024). Third is interest-rate and coverage risk: interest expense rose from $293 million in Q2 2025 to $355 million in Q2 2026, leaving roughly 1.83x coverage, so a prolonged high-rate environment pressures both earnings and financing costs. Fourth is valuation and sentiment risk — the 73% spread between the $49 and $85 analyst targets and 2026 downgrades from Argus and Seaport Global show low conviction, and a break below the $62.72 52-week low could trigger further downside toward $49.00.
The 12-month outlook is split into three scenarios summing to 100% probability. The base case (55% probability, $68-$76 target range) assumes low-single-digit revenue growth, forward EPS near the $5.89 consensus, a multiple holding near 14x forward earnings and 1.54x book, and the 4.41% dividend driving most of total return — anchored by the $72.00 average analyst target. The bull case (20% probability, $80-$85) requires favorable multi-state rate-case rulings restoring allowed returns, confirmation that the Q3 miss was storm-driven, and interest costs stabilizing as Aquarion proceeds reduce financing needs, supporting multiple expansion toward the 1.9x-2.1x book band and the $85 high target. The bear case (25% probability, $49-$63) assumes an adverse rate-case outcome, storm and interest costs outrunning recovery, and forced equity or debt issuance, retesting the $62.72 low and potentially sliding toward the $49.00 analyst low target. The base case is most likely, with the key assumption being that Q4 2026 results show revenue stabilizing rather than confirming a second consecutive year-over-year decline.
ES appears fairly valued rather than clearly overvalued or undervalued. It trades at 14.77x trailing and 14.18x forward earnings, a 1.54x price-to-book, 1.84x price-to-sales, and 10.04x EV/EBITDA — in line with or slightly below the typical regulated electric peer group and well under its own 2021-2022 book multiples of 1.9x-2.1x. The 4.41% dividend yield is above the sector average and covered by a 65.0% payout ratio, supporting the income case, while the 10.45% ROE and 12.49% net margin justify a market-weight multiple rather than a premium one. The PEG ratio of 0.146 is misleading because it reflects a depressed trailing earnings base (quarterly EPS of $0.14) rather than genuine deep-value growth. At 1.54x book the market is not pricing in optimistic expectations, but the discount to history is fair compensation for 1.87x debt-to-equity, a 0.65 current ratio, and a 1.1% FCF yield. The market appears to expect modest regulated growth consistent with the $5.89 forward EPS consensus, not a re-rating.
From a risk/reward standpoint, ES is a reasonable income holding but not a compelling new buy at $69.84. The stock sits just 3.1% below the $72.00 average analyst target, leaving thin upside, while the 4.41% dividend yield and 0.663 beta provide a genuine income and stability cushion — the shares rose 7.05% over the past month against a 4.99% decline in the S&P 500. The biggest downside risk is a break below the $62.72 52-week low, which would open roughly 10.2% of downside to that level and up to about 30% toward the $49.00 analyst low target if rate-case outcomes disappoint. Valuation at 14.18x forward earnings and 1.54x book is fair rather than cheap, and the 2.71 recommendation mean with 9 Holds and 3 Sells signals low analyst conviction. It is a good buy primarily for income-focused investors with a multi-year horizon who want low-volatility utility exposure and can tolerate limited capital appreciation; more aggressive investors should wait for a retest of the low-$60s or a favorable rate-case ruling before adding.
ES is better suited to long-term, income-oriented holding than short-term trading. It is a mature regulated utility with low growth (Q2 2026 revenue up just 2.29% year over year, and negative in Q3 2026), a 0.663 beta that dampens volatility, and a 4.41% dividend yield covered by a 65.0% payout ratio — characteristics that reward patience rather than momentum. Short-term traders face a choppy, range-bound tape: the stock is down 2.38% over one year and 3.44% over three months despite a 7.05% one-month bounce, with well-defined levels at $62.72 support and $76.57 resistance. Earnings visibility is moderate but item-sensitive, with quarterly net margins swinging from 1.85% to 13.47% and a $118 million loss in Q3 2024, so near-term results can be noisy. A minimum holding period of 2-3 years is appropriate to capture the dividend, allow rate-case outcomes to resolve, and give the rate-base investment program time to compound earnings; investors should reassess if the stock breaks below $62.72 or if free cash flow turns negative.