ES — Eversource Energy

As of 2026-09-13, ES sits at $68.52 in the lower-middle of its 52-week range ($62.89-$76.57), down 4.23% over one month, 6.27% over six months and 3.56% over the past week, with RSI at 34.54 and price below its 20-, 50- and 200-day moving averages - a persistent grind lower rather than a crash. The news flow explains the mood: Q2 2026 revenue of $2.90B missed the $2.99B consensus on mild weather, the GAAP EPS line printed just $0.14 because of a $0.30/share Aquarion charge, the March 2026 FERC base-ROE order is still compressing transmission returns, and management has flagged ~$800M of equity issuance in late 2027 plus ATM capacity through 2029. Analyst consensus is a genuine Hold (9 buys, 16 holds, 4 sells) with a $73.80 average target; the Moody's stable outlook upgrade, the completed Aquarion sale, reaffirmed guidance and the 4.5% yield are what keep sentiment from turning outright negative. Note the live brief quotes ~$70.44, a slightly earlier snapshot than the $68.52 FMP price used throughout this report.

Revenue growth is decelerating on a YoY basis and is weather-distorted: Q1 2026 revenue of $4.50B was +9.4% YoY (versus +23.6% in Q1 2025) while Q2 2026 revenue of $2.90B was only +2.3% YoY (versus +12.0% in Q2 2025), with Q2 softness explicitly blamed on milder weather. Operating margin is stable-to-modestly-better in a 21-24% band - Q2 2026 was 22.5% ($652M operating income) versus 23.4% a year earlier, while Q1 2026 improved to 23.9% from 22.5%. The EPS line is the messy part: Q4 2023 (-$3.68) and Q3 2024 (-$0.33) were destroyed by offshore-wind impairments, and Q2 2026 GAAP EPS of $0.14 carries the Aquarion charge (non-GAAP was $0.87). The clean read is FY2025 GAAP EPS of $4.57 (1.50 + 0.96 + 0.99 + 1.12) against FY2026 non-GAAP guidance of $4.57-$4.72 - low-single-digit growth at best, below the advertised 5-7% framework - and FY2027 consensus EPS of $4.647 implies essentially zero growth next year. Cash generation is the one clear inflection: TTM operating cash flow of ~$4.43B is up ~34% YoY from ~$3.30B, and quarterly free cash flow swung from -$858M/-$547M prints in 2024 to +$315M in Q1 2026 and +$76M in Q2 2026. Net: decelerating revenue, stable margins, flat-to-soft EPS, inflecting cash flow - a utility in a regulatory/rate-base valley, not a structural collapse.

Cheap versus its own history, but only moderately cheap in absolute terms. As of 2026-09-13 the stock trades at $68.52, or 17.75x TTM EPS of $3.85 - a figure distorted upward by the $0.30 Aquarion charge sitting in the TTM window - so the more honest multiple is ~14.8x on the FY2026 guidance midpoint of $4.645 and on FY2027 consensus of $4.647. Against a 5-year average P/E of 21.6x and 5-year average P/S of 2.18 (current 1.84), that is a large discount; P/B of 1.58 on a 10.4% ROE is roughly market-consistent. The 4.52% dividend yield beats the utility sector median, and the deterministic model's own overlay calls the stock "Cheap vs. its own history" (70.9). PEG of 0.27 is not usable given the depressed trailing base. The discount is partly earned: the FERC base-ROE cut, ~$800M of 2027 equity issuance, Connecticut regulatory friction and a 4.7% ROIC all justify trading below the sector. I'd call the shares modestly undervalued - roughly 5-10% - not mispriced.

The headline P/E is a trap in both directions. On TTM GAAP EPS of $3.85, ES screens as a 17.8x utility; on the clean forward number it is ~14.8x, genuinely cheap for a regulated delivery utility with a 4.5% yield - so the market is not pricing disaster, it is pricing no growth. That is the key point as of 2026-09-13: FY2027 consensus EPS of $4.647 versus the FY2026 guidance midpoint of $4.645 means the Street has already cut the 5-7% EPS growth framework to roughly zero for next year. Anything that restores even 4-5% growth visibility - constructive CT/MA rate orders, the ISO-NE Maine transmission award converting into rate base, electrification-driven load growth - is upside the multiple does not reflect; anything that erodes it further (another adverse FERC ROE appeal, a bad storm-cost disallowance, a larger-than-expected 2027 equity raise) and 14-15x starts looking like fair value rather than a discount. The price is discounting the bear case and ignoring the base case.

As of 2026-09-13, RSI(14) was 34.54 - near-oversold but not at the sub-30 washout level that has historically marked utility entry points - and price was below every key average: -3.47% versus the 20-day (~$70.98), -5.53% versus the 50-day (~$72.53) and -2.44% versus the 200-day (~$70.23). Returns of -3.56% (1 week), -4.23% (1 month), -0.25% (3 months) and -6.27% (6 months) describe a slow bleed with a fresh leg lower into September, not a range trade. The 52-week range is $62.89-$76.57, leaving roughly 8% of air below to the low. Implication: there is no reason to chase. A reclaim of the 50-day (~$72.50) or an RSI push back above 40-45 would be the first evidence this pullback is an opportunity rather than a continuation; until then, weakness is the trend. The September 21, 2026 ex-dividend date adds a mechanical ~$0.79 drag in the near term.

• Interest rates and the 10-year Treasury: ES's 0.698 beta makes it a bond proxy - a 4.5% dividend yield loses relative appeal as risk-free yields rise, and a multi-year capex program must be refinanced at whatever rates prevail.
• FERC transmission policy: the March 2026 base-ROE order cut allowed returns on electric transmission, structurally lowering earnings on one of ES's highest-quality asset classes.
• State regulation in Connecticut, Massachusetts and New Hampshire: rate-case outcomes, storm-cost recovery and disallowances are the single biggest idiosyncratic earnings swing factor.
• Regional electrification and load growth: heat pumps, EVs and data-center demand in New England support long-run rate-base growth, but the payoff is years out and heavily capex-funded.
• Utility sector rotation and capital markets: ES is a defensive income holding whose planned ~$800M 2027 equity issuance plus ATM program makes it sensitive to both its own share price and financing costs when it raises capital.

• Q3 2026 earnings (expected late October/early November 2026): the first clean post-Aquarion quarter, with load-growth tracking and any revision to the $4.57-$4.72 guidance.
• Pending and future Connecticut and Massachusetts rate case and storm-cost recovery rulings.
• Conversion of the ISO-NE preliminary selection into an approved, funded northern Maine transmission project - direct rate-base growth.
• Dividend declared September 10, 2026 ($0.7875/share, payable September 30, ex-date September 21) and the trajectory of future increases against the 4.5% yield.
• Execution and timing of the ~$800M equity issuance planned for late 2027 and any ATM activity - the main per-share EPS swing factor.

• Regulatory: adverse CT/MA rate orders, cost disallowances, or a further FERC ROE reduction would cut already-flat 2027 EPS estimates.
• Dilution: ~$800M of equity in late 2027 plus ATM capacity through 2029 caps per-share growth; the Street already models zero 2027 EPS growth versus 2026.
• Balance sheet and self-funding gap: debt-to-equity of 1.82, current ratio of 0.80 and roughly breakeven free cash flow mean the dividend is funded with external capital - fine until credit markets or ratings turn (Moody's is stable, not improving).
• Weather and volume sensitivity: the Q2 2026 revenue miss ($2.90B vs. $2.99B) shows earnings still swing on weather, not just rates.
• Rate competition: with a 0.698 beta and a 4.5% yield, a rising 10-year Treasury compresses the multiple regardless of operating performance.
• Low ROIC (4.7%) plus regulatory lag: a large capex program that earns below its cost of capital destroys value rather than creating it.

Eversource is a decent, not great, regulated utility at a modestly attractive price - and that distinction matters. Post-Aquarion it is a cleaner pure-play electric and gas delivery business serving ~4 million customers, with a 4.5% dividend yield, an improving cash-flow profile (TTM operating cash flow +34% YoY, quarterly FCF now positive) and a stable credit outlook. But the March 2026 FERC ROE cut, Connecticut regulatory friction, ~$800M of planned 2027 equity issuance and a 4.7% ROIC mean the 5-7% EPS growth framework is not currently being delivered - consensus has 2027 EPS flat versus 2026. At ~14.8x forward earnings versus a 21.6x 5-year average you are paid to wait, but the return is the dividend plus modest multiple repair, not a growth story. I would not buy aggressively at $68.52 with the tape below every moving average; this is a scale-in-on-weakness holding for income investors, not a momentum or growth buy.

I applied a forward P/E of ~15.7x to clean forward EPS of $4.645 (the midpoint of FY2026 guidance, which is also essentially FY2027 consensus at $4.647), a deliberate discount to ES's own 5-year average P/E of 21.6x and to the ~16.5-17x regulated-utility sector, to reflect the March 2026 FERC base-ROE cut, the planned ~$800M 2027 equity issuance/ATM dilution and Connecticut regulatory friction, partly offset by the post-Aquarion balance-sheet improvement and the 4.5% yield. A dividend-discount cross-check (D0 $3.15, required return 8.5%, growth 4.0%) lands at roughly $73, confirming the figure.