Eversource Energy to Benefit From Strategic Infrastructure Investments

Eversource Energy ES has been making strategic investments to strengthen its transmission and distribution networks. Grid modernization and investments in advanced metering infrastructure are improving operational efficiency and service reliability, which should attract more customers to its services.

The company’s long-term (three to five years) earnings growth rate is projected at 5.92%.

Tailwinds

Eversource has outlined a long-term capital investment plan of $24.2 billion for the 2025-2029 period, including nearly $16.2 billion for electric and natural gas distribution networks and $6.8 billion for the electric transmission segment. The company also expects additional capital investment potential of $1.5-$2.0 billion over the same time frame.

ES also plans to invest nearly $2 billion in replacing aging infrastructure, $1.5 billion in its cable undergrounding program, $1 billion in substation development, and $0.5 billion in clean energy initiatives through 2028.

Eversource Energy’s customer-focused investments in electric transmission and distribution are supported by constructive regulatory mechanisms, ensuring timely cost recovery for the majority of its businesses. The consistent performance and investments are likely to support long-term earnings per share growth of 5-7% from 2024 base.

Headwinds

In January 2025, the company announced a definitive agreement to sell Aquarion Water Company to the Aquarion Water Authority for $2.4 billion. In November 2025, Connecticut’s Public Utilities Regulatory Authority (PURA) halted the proposal citing concerns over possible rate hikes and insufficient regulatory oversight, leading Eversource Energy to pursue alternative financing and explore a new rate case for Aquarion Water.

Eversource Energy outsources certain business activities to third-party suppliers and service providers. If these companies do substandard work, it could harm the company’s business, reputation and its operations.

Price Performance

Over the past year, ES shares have risen 15.3%, but lagged behind the industry’s growth of 18.9%.

Zacks Rank & Stocks to Consider

ES currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are The AES Corporation AES, NextEra Energy, Inc. NEE and PG&E Corporation PCG, 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.

AES, NextEra, and PG&E delivered an average earnings surprise of 14.68%, 4.39%, and 0.47%, respectively, over the last four quarters.

The Zacks Consensus Estimate for AES’ 2025 earnings per share (EPS) has moved up 0.46% in the past 60 days.

The consensus mark for NEE and PCG’s 2025 EPS has remained constant at $3.69 and $1.50, respectively, over the said time frame.

 

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This article originally published on Zacks Investment Research (zacks.com).

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