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Investing.com - Scotiabank lowered its price target on Eversource Energy (NYSE:ES) to $63.00 from $64.00 on Thursday, while maintaining a Sector Underperform rating. The new target aligns closely with InvestingPro’s Fair Value assessment, which suggests the stock is slightly overvalued at its current price of $65.26.
The Connecticut Public Utilities Regulatory Authority (PURA) unanimously rejected Eversource’s planned $1.6 billion sale of its Aquarion water utility to the Aquarion Water Authority (AWA). Regulators determined the transaction was not in the public interest, despite AWA being a quasi-public entity specifically created to acquire the asset.
The failed transaction will impact Eversource’s balance sheet, as the company expected to receive $1.6 billion in cash by year-end. The utility may now need to raise additional equity capital in the absence of the sale proceeds. This raises concerns given InvestingPro data shows Eversource already operates with a significant debt burden of $29.8 billion and a debt-to-equity ratio of 1.86, while its current ratio of 0.71 indicates short-term obligations exceed liquid assets.
Scotiabank noted the rejection reinforces its view that Connecticut remains "an extremely challenging regulatory environment, possibly still the toughest in the country," despite recent changes to the commission. The firm also expressed concerns about Massachusetts regulatory developments and Eversource’s exposure to offshore wind cost overruns.
Eversource Energy remains Scotiabank’s "least favorite regulated utility stock," with the firm stating that "despite the cheap valuation, we continue to believe that things can get worse before they get better."
In other recent news, Eversource Energy reported its third-quarter earnings, with earnings per share reaching $1.19. This figure matched Scotiabank’s estimate and exceeded the general market consensus of $1.15. Despite this, Scotiabank maintained a Sector Underperform rating but increased its price target for Eversource to $64.00 from $55.00. In another development, Eversource Energy faced a setback when the Connecticut Public Utilities Regulatory Authority unanimously rejected its proposal to sell the Aquarion Water Company subsidiary. This decision was based on concerns about managerial responsibility and governance. Following this, Mizuho downgraded Eversource Energy from Outperform to Neutral, adjusting the price target to $68.00 from $81.00, due to regulatory concerns in Connecticut. Additionally, Eversource’s Q2 2025 results showed a slight increase in earnings per share to $0.96, compared to $0.95 in the previous year. The company reaffirmed its full-year earnings guidance, projecting a range between $4.67 and $4.82 per share.
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