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Investing.com - Jefferies raised its price target on Eversource Energy (NYSE:ES) to $54.00 from $47.00 on Monday, while maintaining its Underperform rating on the utility company’s stock. Currently trading at $65.70, the stock has gained 17.2% year-to-date, though InvestingPro analysis suggests the stock is currently overvalued.
The firm cited improved cash flows in the first half of 2025 and benefits from Connecticut securitization as factors behind the price target increase, which led to a 2-4% increase in earnings per share estimates.
Despite the higher price target, Jefferies continues to see challenges for Eversource, noting the company faces "below-average EPS growth not fully reflected in valuation" and a 13% downside to consensus earnings estimates for fiscal years 2028-2029.
The research firm calculates this translates to just a 2-3% earnings per share compound annual growth rate and approximately a 5x price-to-earnings growth ratio, compared to U.S. peers at roughly 1.8x.
Jefferies also factored in Revolution Wind project concerns, assuming a $650 million liability ($1.60 per share), which represents only about a $0.50 higher drag on the stock but carries "large" tail risks according to the firm’s analysis.
In other recent news, Eversource Energy reported its second-quarter 2025 earnings, showing an earnings per share (EPS) of $0.96, which aligned with analysts’ expectations. However, the company experienced a revenue shortfall, reporting $2.84 billion compared to the anticipated $2.96 billion. This represents a 4.05% miss in revenue, potentially raising concerns among investors. Additionally, Eversource Energy’s Board of Trustees approved a quarterly dividend of $0.7525 per share, payable on September 30, 2025. In other developments, the Trump administration has moved to halt the Maryland Offshore Wind Project, which was initially approved by the Biden administration. This decision follows a separate action by the U.S. Department of Interior to stop offshore work on Orsted’s Revolution wind farm, a project with financial ties to Eversource. Despite these challenges, DA Davidson reaffirmed its Buy rating for Eversource Energy, maintaining a price target of $77.00.
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