Copyright Benzinga
Eversource Energy (NYSE:ES), one of the largest utility providers in the Northeastern U.S., is positioned for steadier growth as its regulatory environment shows signs of improvement. Bank of America analyst Ross Fowler upgraded Eversource Energy to Buy from Neutral and raised its price forecast to $85 from $73, citing improving regulatory tone in Connecticut and clearer balance sheet visibility. Analyst said Connecticut appears to be undergoing a positive regulatory reset following recent structural and leadership changes at the state’s utility regulator, PURA (Public Utilities Regulatory Authority). Also Read: SLB To Rally Around 44%? Here Are 10 Top Analyst Forecasts For Tuesday Positive Regulatory Reset in Connecticut The implementation of Senate Bill 4, which expands PURA to five commissioners and allows utilities to securitize storm costs, and the departure of former Chair Marissa Gillett, are seen as major turning points. Governor Lamont’s October 20 nomination of four new PURA commissioners described as more balanced and technically experienced signals a shift toward stability in future regulatory proceedings, the report said. Key Near-Term Catalysts The bank highlighted near-term catalysts, including the proposed decision on the Aquarion sale, announced on October 22, and the final order on Yankee Gas. Even if the Aquarion sale is not approved, the firm expects Eversource to re-market the segment, suggesting management is committed to streamlining operations. The analyst said balance sheet clarity could unlock further rate base growth, noting that with Revolution Wind largely de-risked and the Aquarion sale and storm cost recovery together addressing about $3 billion in deferred items, Eversource is approaching a “cleaner balance sheet and improved funding flexibility.” Revised Earnings Outlook and Financial Projections Bank of America raised its earnings outlook for Eversource Energy, citing a steady recovery in deferred costs and easing regulatory lag. The firm now expects 2026 earnings of $5.05 per share, up from $4.95. Estimates for 2027 and 2028 were also increased to $5.40 (from $5.26) and $5.70 (from $5.57), respectively. The bank maintained its 5-7% EPS CAGR outlook through 2029, projecting a gradual improvement in FFO-to-debt to 14.2% as these measures strengthen long-term earnings visibility. The bank’s price forecast of $85 on Eversource Energy is based on a sum-of-the-parts (SOTP) valuation. The firm applies 2027 average peer price-to-earnings (P/E) multiples of 16.4x for the electric segment, down slightly from 16.9x previously, and 16.1x for natural gas. These multiples are further adjusted upward by 5% to reflect the sector’s expected earnings growth potential. Price Action: ES shares were trading higher by 0.55% to $73.25 at last check Tuesday. Read Next: Ford Stock Is Racing Higher Tuesday: What’s Driving The Action? Photo by Sundry Photography via Shutterstock
