Eversource Energy

Analysis of ES Stock

Technical Perspective ES shows modest recent gains but has underperformed the broader market over the medium term. Trading near the upper end of its 52-week range suggests it is relatively expensive historically, though not clearly overbought. The low beta indicates lower volatility, which may appeal to conservative investors.

Fundamental Outlook Revenue growth is solid, but profitability margins have shown volatility due to rising costs. The company maintains healthy net income and adequate interest coverage, though incomplete debt and efficiency data limit a full health assessment. Operational performance remains reasonable, supported by a stable EBITDA margin.

Valuation & Risk Considerations The current valuation appears elevated, but the lower forward P/E reflects expected earnings improvement. With a PEG ratio slightly above 1, the stock seems fairly to marginally overvalued. Key risks include a significant maximum drawdown and incomplete financial disclosures, though low beta and no short interest provide some comfort.

---

Investment Recommendation

ES presents a mixed profile with stable revenue and manageable risk, but margin pressures and elevated valuation temper upside potential. It may suit investors seeking a lower-volatility utility stock with moderate growth expectations. However, given its underperformance vs. the market and lack of clear undervaluation, it is not a compelling buy at this time. Consider monitoring for improved profitability or a more attractive entry point.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, here's a 12-month outlook for ES:

ES faces a challenging outlook with modest catalysts primarily from stable utility operations and potential regulatory rate adjustments, though margin pressures and elevated valuation remain significant headwinds. Key risks include persistent profitability pressures from rising operational costs and incomplete financial disclosures that obscure full assessment. While the low beta quality offers defensive positioning for conservative investors, the stock appears fairly to marginally overvalued currently, suggesting limited upside potential without a compelling entry point at these levels. Given the mixed profile with tempered growth expectations, ES may deliver modest single-digit returns but appears unlikely to significantly outperform the broader market without improved profitability metrics or more attractive valuation entry levels emerging first.

Key catalysts: Regulatory rate approvals, operational cost efficiencies Potential risks: Ongoing margin volatility, elevated historical valuation levels Target price range: $70-75 (based on current technical trading range near 52-week highs)

Wall Street Consensus

Most Wall Street analysts are optimistic about Eversource Energy's 12-month outlook, with consensus target around $73.67, indicating expected upside potential.

Overall, ES has investment potential but also faces challenges. Here are key factors to weigh before investing.

ES has demonstrated mixed performance with recent gains but underperformed the broader market over the medium term.

Over the past month, the stock has gained 2.48%, though it declined 2.39% over three months. With a -2.64% relative strength versus the market, it has underperformed the benchmark despite its low 0.792 beta, indicating less volatility.

Currently trading at $71.85, the stock is near the upper end of its 52-week range ($52.28-$75.25), sitting at approximately 94% of its high after a maximum drawdown of -15.13%. This positioning suggests the stock is neither clearly overbought nor oversold but is relatively expensive compared to its recent trading history.

Revenue & Profitability ES demonstrated solid revenue growth with quarterly revenue increasing from $3.22 billion to $3.37 billion. Profit margins showed volatility, with the gross profit ratio declining from 51.3% to 29.2%, likely due to rising cost of revenue, while the net income ratio remained healthy at 12.5%. The company maintained double-digit profitability despite margin compression in the latest quarter.

Financial Health The company's interest coverage ratio of 2.15 indicates adequate ability to service debt obligations, though it suggests moderate financial flexibility. Notably, key debt and liquidity metrics are unavailable, limiting a full assessment of leverage and cash flow stability. Further analysis of balance sheet items would be required to evaluate overall financial resilience.

Operational Efficiency Available efficiency metrics are limited, but the pretax profit margin declined sequentially from 5.4% to 14.4%, reflecting potential operational headwinds. The absence of ROE and asset turnover data prevents a comprehensive efficiency analysis, though the stable EBITDA margin of 38.0% suggests reasonable operational performance relative to revenue.

Valuation Level: ES's current TTM PE ratio of 23.61 appears elevated for a utility stock, but the forward PE of 15.00 indicates anticipated earnings growth that would bring valuation to a more reasonable level. The PEG ratio of 1.14, being slightly above 1.0, suggests the stock may be fairly valued to marginally overvalued relative to its growth prospects, while the modest PB ratio of 1.71 doesn't signal significant overvaluation.

Peer Comparison: Without industry average data for comparison, a definitive peer assessment cannot be made. However, utility stocks typically trade at lower multiples than the broader market, so ES's current multiples would need to be evaluated against specific utility sector benchmarks to determine its relative valuation position. The absence of an EV/EBITDA ratio further limits the comparative analysis.

The stock exhibits below-average market sensitivity with a beta of 0.792, suggesting lower volatility risk than the broader market. However, investors should note the one-year maximum drawdown of -15.13%, which represents a significant decline from peak to trough and indicates substantial downside risk during recent market stress.

The lack of reported short interest suggests minimal active speculative pressure against the stock, which is generally a positive sign. Nevertheless, the absence of short interest data does not eliminate other potential risks, and investors should monitor broader market liquidity and any company-specific developments that could impact its stability.