Eversource Energy

ES · NYSE · USD

Whether Eversource can earn reliable returns on a $26.5 billion New England investment plan while FERC and Connecticut regulators decide how much of that cost customers and shareholders bear.

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Regulated rate base growth

    The bull case rests on a large approved capital plan that keeps adding to rate base, so earnings grow as long as regulators allow timely cost recovery.

  • New England load growth

    Rising electric demand from heating, transport and industry keeps adding transmission and distribution projects, giving management room to keep investing.

  • Balance sheet repair

    Selling the water business, securitizing storm costs and issuing hybrid debt lifted credit metrics, which lowers the cost of funding that plan.

  • Connecticut regulatory reset

    A rebuilt Connecticut commission has begun producing constructive decisions, and bulls expect the first CL&P rate request in years to be treated fairly.

Bear case

  • Transmission return on equity

    The bear case is that a federal regulator sets the transmission return, and its recent cut to the allowed rate is outside management's control.

  • Connecticut election-year politics

    Connecticut officials are focused on customer bills during an election year, so a large CL&P request and storm cost recovery face skeptical review.

  • Offshore wind cost overruns

    The company keeps booking charges tied to a sold offshore wind project, raising its estimate of what it still owes the buyer each quarter.

  • Dependence on external financing

    The capital plan is larger than the cash the business generates, so Eversource must keep raising debt and equity to keep credit metrics above thresholds.

Bull and bear points

Growth & Execution

In short: Load growth and a larger capital plan support earnings, but 2026 guidance has already been cut twice.

Bull · 2

  • Capital plan raised to $26.5 billion

    At the Q3 2025 call the plan was $24.2 billion; by February management had raised it to $26.5 billion, adding mostly Massachusetts electric and gas distribution work.

    Tone shiftQ3 FY2025 → Q4 FY2025

  • Load growth outpaces rooftop solar

    Management reports weather-normalized load growth of about 2% and a record summer peak, which supports the case for more distribution and transmission investment.

    Q3 FY2025 call
Bear · 2

  • 2026 guidance cut twice in five months

    In February management guided to $4.80 to $4.95 for 2026; the FERC rate cut and the Aquarion sale brought the range down to $4.52 to $4.72 by July.

    Tone shiftQ4 FY2025 → Q2 FY2026

  • CL&P rate request is the first since 2017

    The $451 million request is the first Connecticut Light & Power distribution increase since 2017, and almost all of it reflects past capital spending that regulators must now find prudent.

    Q2 FY2026 call

Profitability & Financial Strength

In short: Credit metrics improved sharply, but interest and depreciation on new plant absorb much of each rate increase.

Bull · 2

  • Credit metrics above downgrade thresholds

    Management reports FFO to debt of 14.3% at S&P and 15.7% at Moody's, comfortably above the levels that would trigger a downgrade, and Moody's moved its outlook to stable.

    Q2 FY2026 call

  • Aquarion proceeds repaid parent company debt

    The water sale brought $1.7 billion of net cash that went to parent debt, reducing interest expense and the alternative financing the five-year plan had assumed.

    Q2 FY2026 call
Bear · 2

  • Capital spending outruns internally generated cash

    Free cash flow was $298 million over the last twelve months, so the plan needs roughly $8.5 billion to $9 billion of incremental debt and alternative financing.

    Q4 FY2025 call

  • Interest and depreciation absorb each rate increase

    Segment results show rate increases repeatedly offset by higher interest, depreciation and property taxes, so gross revenue growth translates into slower growth in net earnings.

    Q4 FY2025 call

Market Position

In short: State regulators have grown more constructive, while the federal transmission return cut is under appeal.

Bull · 2

  • ISO New England picked the Eversource-Avangrid bid

    Eversource's share of the roughly $2.2 billion Maine-to-New Hampshire transmission line is about $700 million, with an in-service date expected in 2032.

    Q2 FY2026 call

  • Data center demand now treated as an opportunity

    Three months ago management said it did not want data center load; it now says capturing that demand requires adding generation and gas capacity to New England.

    Tone shiftQ1 FY2026 → Q2 FY2026
Bear · 2

  • FERC cut the transmission base return to 9.57%

    Management estimates the lower return cuts 2026 after-tax earnings by about $70 million, and the refund period ordered for past years is still being challenged in court.

    Q1 FY2026 call

  • Connecticut trimmed the storm cost award

    PURA approved about $870 million of the $975 million requested, so part of the storm spending is not recovered and management says it is reviewing its options.

    Q2 FY2026 call