On Thursday, Goldman Sachs updated its financial outlook for Eversource Energy (NYSE:ES), raising the stock's price target from $73.00 to $74.00 while maintaining a Buy rating. The firm's analysis followed the company's first-quarter earnings for the year 2024, recognizing the potential for growth driven by several factors.
Eversource Energy's leverage to transmission, load growth, and a path to an improved balance sheet were cited as key reasons for the optimistic outlook. Despite acknowledging regulatory challenges in Connecticut, the analysis pointed out that approximately 70% of Eversource's business operates within favorable regulatory jurisdictions, including Federal Energy Regulatory Commission (FERC) transmission and Massachusetts.
Goldman Sachs highlighted Eversource Energy's attractive risk-return profile, especially given the stock's significant underperformance over the past year. The stock is currently valued at a price-to-earnings (P/E) ratio of 12.4x based on the firm's 2025 projections, which is lower than the average P/E ratio of 15.7x for the firm's coverage universe.
The report concluded with a positive outlook, noting a potential 27% total return to the newly revised price target of $74.00 for Eversource Energy shares. This adjustment reflects the firm's confidence in the company's ability to capitalize on its strategic advantages in the energy market.
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