Based in Springfield, Massachusetts, Eversource Energy (ES) engages in the energy delivery business and is involved in the transmission and distribution of electricity, solar power facilities, and distribution of natural gas. With a market cap of $23.9 billion, the company also operates regulated water utilities and serves residential, commercial, and industrial customers.
Companies worth more than $10 billion are generally described as “large-cap” stocks, and Eversource Energy fits right into that category. The company distinguishes itself as a national leader in energy efficiency, corporate citizenship, and clean energy and serves more than 4.4 million customers.
Even after a slight pullback from its 52-week high of $69.01 reached earlier this month, shares of Eversource have gained 15.9% over the past three months, surpassing The Utilities Select Sector SPDR Fund’s (XLU) 13.2% returns over the same time frame.
However, in the longer term, ES stock is up 10.8% on a YTD basis, lagging behind XLU’s nearly 25% gains. Moreover, shares of ES have gained just 6.5% over the past 52 weeks, underperforming XLU’s 21.9% returns over the same time frame.
Yet, ES has been trading above its 200-day and 50-day moving average since early July, indicating a bullish trend.
Eversource Energy has underperformed over the past year due to significant financial challenges, including a major impairment charge on offshore wind projects and broader sector issues exacerbated by rising interest rates and a shift away from ESG investments. However, the stock shot up more than 1% following its Q2 earnings release on Jul. 31 due to its adjusted EPS of $0.95, perfectly aligning with consensus estimates despite a revenue miss. This was driven by an increase in earnings from the Electric Transmission and Natural Gas Distribution segments coupled with higher demand for electricity during the peak summer months.
To further emphasize the stock’s underperformance, ES has lagged behind its rival, Edison International (EIX), which gained 20.5% over the past 52 weeks and 20.7% on a YTD basis.
However, despite ES’ relative underperformance over the past year, Wall Street remains moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from 18 analysts in coverage, and the mean price target of $70.80 suggests just a 3.5% premium to its current levels.
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.
