Eversource (ES) to Gain From Investments & Renewable Focus
Eversource Energy’s ES long-term capital investment plans to expand its infrastructure and expansion of renewable operations will further drive its performance. The company has plans to expand its water business through acquisitions.
However, this Zacks Rank #4 (Sell) company is exposed to stringent regulations and substandard performance from third parties that act as headwinds.
Tailwinds
Eversource pursues organic growth to expand operations. It is currently focused on upgrading its electric distribution and transmission infrastructure. The company forecasts a capital investment of $21.5 billion during 2023-2027 period, out of which it plans to invest $14.2 billion in electric and natural distribution networks and $5.3 billion in its electric transmission segment. It has planned to make clean energy investments of $2 billion during 2023-2027 to strengthen its renewable portfolio.
ES plans to monetize its existing 50% interest in its three jointly owned and contracted offshore wind projects (South Fork Wind, Revolution Wind and Sunrise Wind) with a total capacity of 1,758 megawatts.
The company diversified operations and forayed into the water business through the acquisition of Aquarion Water Company in December 2017. This will help ES to explore and benefit from the long-term opportunity that the water and wastewater service business presently offers. Eversource plans to invest nearly $1.02 billion through 2027 in the water distribution business to further strengthen its operations.
Headwinds
The company’s operations are subject to federal, state and local legislative requirements, as well as extensive environmental regulations. The introduction of new mandates could impact its financial performance.
Eversource outsources certain business functions to third-party suppliers and service providers. Substandard performance by these third parties could harm its business, reputation and results of operations.
Stocks to Consider
Some better-ranked stocks from the same industry are Consolidated Edison ED, Exelon Corporation EXC and NiSource Inc. NI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ED’s long-term (three to five years) earnings growth rate is 2%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) indicates a year-over-year increase of 7.9%.
EXC’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS indicates a year-over-year improvement of 4%.
NI’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for 2023 EPS indicates year-over-year growth of 8.2%.
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Exelon Corporation (EXC) : Free Stock Analysis Report
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Eversource Energy (ES) : Free Stock Analysis Report
