BMO Capital Markets has adjusted its outlook on Eversource Energy (NYSE: NYSE:ES), reducing the price target to $72 from the previous $74 while maintaining a Market Perform rating on the stock.
The adjustment comes after a thorough quarterly evaluation and revision of Eversource Energy's third-quarter 2024 earnings estimate to $1.11, an increase from $0.97 in the third quarter of 2023.
The analyst highlighted several factors contributing to the anticipated year-over-year earnings growth. Among these are the expansion of the electric rate base and favorable weather conditions in New Hampshire, which are expected to boost performance.
Additionally, a reduction in minor storm costs and historical sensitivity to tax-related activities at the parent company during the third quarter were noted as influential factors.
Eversource Energy's management is expected to be in a position to narrow its guidance range for the year 2024, likely to align with the current midpoint expectations. This projection is based on the company's performance to date.
In other recent news, Eversource Energy has been making significant strides in its financial and operational performance. The company completed the sale of the Revolution Wind and South Fork Wind projects to Global Infrastructure Partners (GIP), generating approximately $745 million, a lower figure than the initially expected $1.12 billion. Despite this, Eversource Energy's management confirmed their plan to issue equity of up to $1.3 billion and maintain their target for funds from operations (FFO) to debt ratio in the range of 14-15%.
Eversource Energy's strategic shift towards regulated utility operations is evident, with significant investments being made into transmission and distribution infrastructure. The company has also completed the sale of the Sunrise Wind Project and expects to finalize the sale of additional wind projects in the next quarter.
InvestingPro Insights
To complement BMO Capital Markets' analysis of Eversource Energy (NYSE:ES), recent data from InvestingPro provides additional context for investors. Despite the reduced price target, Eversource's market cap stands at a substantial $22.88 billion, reflecting its significant presence in the utility sector.
InvestingPro Tips highlight that Eversource has maintained dividend payments for 26 consecutive years and has raised its dividend for 25 consecutive years, underscoring the company's commitment to shareholder returns. This aligns with the stock's current dividend yield of 4.47%, which may be attractive to income-focused investors.
While BMO Capital Markets projects earnings growth, it's worth noting that Eversource's revenue for the last twelve months as of Q2 2024 was $11.35 billion, with a revenue growth of -10.41% over the same period. However, the company's EBITDA grew by 5.65%, suggesting improved operational efficiency despite top-line challenges.
These insights, along with 5 additional InvestingPro Tips, are available for subscribers looking to deepen their analysis of Eversource Energy's financial health and market position.
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