Eversource Energy (ES.N): Mixed Results into Catalyst Rich 2H

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31 Jul 2026 12:33:25 ET │ 15 pages

Eversource Energy (ES.N)

Mixed Results into Catalyst Rich 2H

CITI'S TAKE

ES heads into 2H with two capex upside catalysts (potential transmission

award and expedited AMI approval), and we continue to think FERC’s Nov

30 transmission ROE decision could land at ~10.43%, which implies a 6.8%

5-year EPS growth rate vs ~6% consensus. On the flip side, ES may need

extra cash if PURA denies potential appeal for CT storm costs and if more

offshore wind liability incurs (less likely), while $880M transmission refund

remains a 2027 decision (ES arguing New England is different from MISO).

Nov 30 FERC Transmission ROE Decision to Drive EPS Upside — One of the most

notable catalysts for Eversource in 2H26 is FERC’s ruling on New England

transmission ROE by November 30. Our view, based on our detailed analysis on the

ROE calculation, is that this regulatory process will yield a FERC ROE outcome of

~10.43% (vs New England Transmission Owners’ 10.79%/11.39% proposal). This

implies an EPS growth rate of 6.8% (we assume the 50bps RTO adder will not be

added back in Connecticut). In our view, NETO is showing more conservative

assumptions for company size adjustments, but more optimistic assumption for

proxy group changes and long-term GDP growth rate. NETO presented both Value

Line and Bloomberg beta and noted that FERC recently encouraged use of the latter.

See the body of the note for a range of potential outcomes, EPS sensitivity, and

detailed discussion for each calculation assumption.

n

Neutral

Catalyst Watch: Upside, expires 25-OCT-26

Price (30 Jul 26 16:00)

US$73.84

Target price

US$81.00

Expected share price return

9.7%

Expected dividend yield

4.4%

Expected total return

14.1%

Market Cap

US$27,770M

Price Performance

(RIC: ES.N, BB: ES US)

Potential Appeal for CT Storm Costs — ES is approved to seek securitization of

~$670M CT storm cost (net of ~$200M previously collected), with all ~$400M of

carrying charges denied, ~$60M deferred, and ~$40M excluded. We think ES is

going to appeal to PURA for recovery of $460M carrying charges + deferrals. If the

appeal is denied, ES may need additional debt/equity issuance.

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