EVERSOURCE ENERGY (ES): what the price requires

The current priced-in claim for EVERSOURCE ENERGY (ES) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ES

Headline

FieldValue
TickerES
CompanyEVERSOURCE ENERGY
Current price$74.95/sh
CompositionElectric Distribution 66% / Natural Gas Distribution 17% / Electric Transmission 15% / Water Distribution 2%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin today22.8%
Multiple paid17x operating income

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 5.5% cost of capital with 4% terminal growth over a 5-year stage (computed at the 5.5% minimum rate; the CAPM rate 5.4% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~11.5%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-1.27σ
cohort percentile (of 70 peers)26
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.39x5expensive
Earnings1.48x3expensive
Relative0.69x5justifies
Growth0.87x3justifies

Families that justify the price: Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.0%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$86.110.87xyesExit EV/EBITDA: 8.4x / 10.4x / 12.4x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$108.060.69xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.6x / 20.0x / 23.4x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth$109.250.69xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$50.411.49xyesBV/sh $43.90, ROE (TTM) 10.6%, ke 9.3%
Two-Stage Excess ReturnAsset$53.891.39xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$61.001.23xyesRev $14.0B, growth 10% (input: historical growth; tapered), Terminal P/S: 1.7x / 2.0x / 2.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$56.041.34xyesEPS $4.67, growth 2% (input: historical EPS growth), PEG=8.04 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$24.523.06xyesNormalized EBIT (5y avg op income, one-time charges added back) $2.50B × (1−21%) / WACC 5.0% → EPV (no growth)
Residual IncomeAsset$54.541.37xyesBV $43.90 + 5yr PV of (ROE (TTM) 10.6% − Kₑ 9.3%) × BV; BV grows 6.9%/yr
Graham NumberAsset$67.921.10xyes√(22.5 × EPS $4.67 × BVPS $43.90) — Graham's conservative floor
EV/EBITDA RelativeRelative$113.310.66xyesEBITDA $5.53B × sector EV/EBITDA 13.0x
FCF YieldEarnings$0.017495.00xyesFCF $236.7M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$150.690.50xyesEPS $4.67 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$16.244.62xyesBV $43.90 × (ROIC 1.9% / WACC 5.0%)
P/Sales SectorRelative$92.720.81xyesRevenue $13.97B × sector P/S 2.5x
PEG Fair ValueRelative$175.130.43xyesEPS $4.67 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$50.491.48xyesEPS $4.67 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$29.3b
Net debt / NOPAT (after-tax)11.06x
Net debt / operating income (pre-tax)8.74x
Interest coverage2.6x
Share count CAGR (dilution)2.2%
Burning cashno

Bullet Takeaways

Bull Case

The earnings line is moving in the right direction, and for a regulated utility that is most of the bull case. First-quarter GAAP earnings rose to $1.61 per share from $1.50 a year earlier, and Eversource reaffirmed a long-term EPS growth target of 5% to 7% measured off its revised 2026 guidance. Utility earnings growth is mechanical in a way that is genuinely attractive: a regulated utility grows its profit by growing its rate base, the pile of approved infrastructure on which regulators let it earn a set return. Eversource has cleaned up its business to focus on exactly that, having exited offshore wind and agreed to sell its Aquarion water arm, leaving a pure regulated electric, gas, and transmission utility.

The investment runway is large and visible. Eversource laid out a $26.5 billion capital plan through 2030, a $2.3 billion increase from the prior forecast, with annual capital spending rising from $4.4 billion in 2025 to $5.5 billion by 2030. The bulk goes to electric distribution, then gas distribution and transmission. Every approved dollar of that spending becomes rate base earning a regulated return, so the capital plan is, in effect, the earnings-growth plan. The plan also includes about $1 billion of Connecticut advanced metering investment and roughly $2 billion of deferred storm-cost recovery from Connecticut and New Hampshire expected over the next year to year and a half, which converts past expenses into recoverable assets.

The valuation and the cash return support the case. On the relative-multiple and growth lenses the units price below where those methods land, so against the utility peer group Eversource trades at a discount rather than a premium, unusual for a company with an above-average capital-growth plan. The dividend continues uninterrupted at $0.7875 per quarter, the kind of steady, growing payout utility investors buy the sector for. The right frame for a utility is not cash flow, which moves with capital spending, but the capacity to fund the capital plan and the dividend while growing rate base, and Eversource is positioned to do that as a streamlined, regulated operator at a peer discount.

Bear Case

The price assumes the regulators keep cooperating, and the most recent evidence is that they have not. Eversource cut its 2026 non-GAAP earnings guidance to a $4.57 to $4.72 range from the original $4.80 to $4.95, citing the impact of a FERC return-on-equity decision and the Aquarion sale. That is the single most important fact in the bear case: the allowed return is the variable that converts the capital plan into earnings, and a downward revision to the allowed return lowers the value of every future dollar of rate base. A utility's earnings growth is only as good as the returns regulators grant, and the FERC decision is a concrete reminder that those returns can move against the company.

Connecticut is the structural overhang. Eversource has been in extended friction with its Connecticut regulator, and the filing documents the tension directly: a dispute over what "the correct legal standard PURA must use in determining whether costs can be recovered through customer rates" should be, and a settlement requiring the company to "pay a $2 million concession to the Office of the Attorney General" tied to performance metrics. A regulated utility cannot escape its regulator, and an adversarial commission in one of its largest states can disallow cost recovery, delay rate cases, and compress the returns that the whole investment thesis depends on. The $2 billion of deferred storm costs the bull case counts on recovering is itself subject to that recovery process going smoothly.

The balance sheet is the third pressure, and it is the part of utility economics that bites when rates rise. Eversource carries about $29.3 billion of net debt, more than nine times trailing operating income, with interest coverage of only 2.4 times. That is normal for the sector, which funds its rate base with heavy borrowing, but it means the company is acutely sensitive to interest rates: a $26.5 billion capital plan has to be financed, and higher borrowing costs eat into the spread between the allowed return and the cost of capital. With the price already discounting the growth, only the relative-multiple and growth lenses support it while asset value and earnings power read rich, the bear case is that the rate-base growth story is priced as if regulatory returns and financing costs stay favorable, and the guidance cut shows that at least one of those assumptions has already slipped.

Valuation

What the price is betting on is steady, regulator-granted growth over a long horizon, roughly six and a half years of above-trend expansion is embedded in the quote. For a utility that translates into a multi-year rate-base build earning an allowed return, which is exactly the $26.5 billion capital plan Eversource has laid out through 2030. The bet is not on a re-rating; it is on the company executing the capital plan and the regulators granting returns close to what the plan assumes.

The methods point in two directions, and the split is the valuation. The relative-multiple lens prices Eversource below the utility peer group, and the growth lens also reaches the price, so on a peer-and-growth basis the units look reasonable to cheap. The asset-value and earnings-power lenses, by contrast, read rich. The reconciliation is the regulated-growth model: a utility's reported earnings and book assets understate the forward earning power of an approved capital plan, so the growth lens, which credits the rate-base build, is the more appropriate frame, while the trailing earnings lens looks expensive because it does not yet capture the planned investment. The peer discount is the notable point, Eversource trades cheaper than comparable utilities despite an above-average capital-growth plan, which is the market pricing in the regulatory risk that the plan's returns may disappoint.

Solvency for a utility is read as capital-return capacity and financing headroom, not as a cash-burn question, because operating cash flow follows the capital cycle. Eversource carries about $29.3 billion of net debt at roughly nine times operating income with interest coverage of 2.4 times, which is standard utility leverage but leaves the company sensitive to interest rates as it finances the plan. The dividend, at $0.7875 a quarter, is the steady return investors hold the stock for. The decisive variable is regulatory: the recent guidance cut tied to a FERC return-on-equity decision shows how directly allowed returns flow into the earnings the price depends on, and the Connecticut regulatory relationship is the swing factor for whether the rate-base growth converts into the 5% to 7% EPS growth the company targets.

Catalysts

The Q1 2026 report, released in early May, was the central recent catalyst and it carried a guidance cut alongside the earnings beat. GAAP earnings rose to $1.61 per share from $1.50 a year earlier, but the company lowered its 2026 non-GAAP EPS guidance to a $4.57 to $4.72 range from the original $4.80 to $4.95, attributing the reduction to a FERC return-on-equity decision and the pending Aquarion water sale. The market took the earnings beat and the guidance revision together, weighing the steady regulated growth against the regulatory headwind that prompted the cut.

The capital plan is the forward driver. Eversource outlined $26.5 billion of infrastructure investment through 2030, a $2.3 billion increase from the prior forecast, with annual capex rising from $4.4 billion in 2025 to $5.5 billion by 2030. Included is about $1 billion of Connecticut advanced metering investment and roughly $2 billion of deferred storm-cost recovery from Connecticut and New Hampshire expected over 12 to 18 months. The dividend was declared at $0.7875 per share, continuing the steady payout.

Into the coming quarters, the events that matter are all regulatory: the Connecticut rate-case dynamics and PURA's posture on cost recovery, the pace at which the deferred storm costs are actually recovered, and the closing of the Aquarion sale. Each of these determines whether the rate-base plan converts into the targeted 5% to 7% EPS growth. The capital-plan execution itself is steadier and less event-driven, so the swing factor for the stock is whether the regulatory relationship in its key states stabilizes after the recent setbacks.

Peer Cohorts (Per Segment, With Filing Citations)

Electric Distribution (reported)

Natural Gas Distribution (reported)

Electric Transmission (reported)

Water Distribution (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 2026 earnings release

View the full interactive ES report on boothcheck