An investment bank and capital markets firm has kept its bearish “stay underperform” rating on Eversource Energy stock due to the ambiguous direction of the sale of its subsidiary Aquarion Water Co. As of Wednesday, Jan. 28, the stock price is $70.23.
However, Jefferies Financial Group did report that “investors we speak to mostly expect that the Aquarion sale is approved on remand.”
“Expect 2026 to be another complicated year with Aquarion sale under PURA (Public Utilities Regulatory Authority) consideration and balance sheet repair hanging in the balance,” Jefferies Financial Group stated in its most recent report Eversource stock. “While the CT outlook has improved, we still see affordability concerns with major rate cases and top-five rates in the US.
“Bulls say the discount accounts for this but we see below-average growth/credit metrics and low capex (capital expenditures) upside. FY26 YoY (year over year) growth will be below-average again. Stay Underperform.”
Jefferies stated that it continues to see a challenged path forward as Eversource’s regulatory activity ramps up.
“Another year of below 5%-7% EPS growth expected in FY26 after ~4% in FY25,” they stated. “We continue to see downside to consensus estimates and shares are relatively expensive when accounting for below-average growth and credit profile.”
The rating comes about two weeks after a Superior Court judge ruled that PURA acted “illegally” in denying the change in control application submitted by Aquarion Water Authority, South Central Connecticut Regional Water Authority (RWA) and Eversource Energy and has remanded the application back to PURA.
Eversource was seeking the change in control following its $2.4 billion purchase of Aquarion Water in a deal that came about after the state legislature approved the creation of the nonprofit Aquarion Water Authority last year.
Jefferies added that it believes the Aquarion sale is “a necessary, but not sufficient part of the plan” for Eversource to right its ship.
“We stress the verbiage of the Superior Court’s decision remanding review back to PURA does not preclude rejection on the merits, for which PURA’s initial order indicates skepticism in addition to procedural concerns,” Jefferies said. “Conversely, it is possible the concurrent rate case filing during the current review process could provide key motivation for PURA to engage in settlement negotiations for approval. There is a path for ES (Eversource) to increase consumer advocate funding to address concerns.”
