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Eversource Energy's (NYSE:ES) most recent earnings announcement in December 2018 indicated that the company benefited from a slight tailwind, eventuating to a single-digit earnings growth of 4.6%. Below, I've laid out key numbers on how market analysts perceive Eversource Energy's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts' outlook for the coming year seems rather subdued, with earnings climbing by a single digit 7.8%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 15% compared to today’s earnings, and finally hitting US$1.3b by 2022.
Although it’s useful to be aware of the growth rate each year relative to today’s figure, it may be more valuable analyzing the rate at which the company is growing on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Eversource Energy's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 7.5%. This means, we can expect Eversource Energy will grow its earnings by 7.5% every year for the next few years.
For Eversource Energy, I've put together three key factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for ES's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ES? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.