Eversource Energy (ES) Improved balance sheet supportive of incremental capex

Equity Research 6 August 2026 | 9:24PM EDT

Eversource Energy (ES): Improved balance sheet supportive of incremental capex; execution on regulatory items in focus

We update our estimates for Eversource Energy (ES) following 2Q26 results. On the Carly Davenport | quarter, ES expanded its incremental capex pipeline by $700mn through a joint Goldman Sachs & Co. LLC ISO-NE transmission project, supporting potential earnings growth toward the upper Beatriz Abreu, CFA half of its 5%-7% EPS CAGR target by 2028. The company also generated ~$1.7bn in | net equity proceeds from the Aquarion sale closed in June, paying down parent debt Goldman Sachs & Co. LLC

and prompting Moody’s to revise its outlook to stable. Looking ahead, key catalysts Jaya Patel | include the early fall securitization filing for ~$670mn in approved CT storm costs, Goldman Sachs & Co. LLC progress on the newly filed CL&P rate case, and FERC’s Section 205 ROE decision Ananya Jaison expected to take effect on November 30. We remain constructive and reiterate our | Buy rating on ES, as we believe that the Aquarion sale should improve operational Goldman Sachs India SPL

focus of the company as it allows Eversource to become a pure-play electric and gas T&D utility. Moreover, while the company recorded a $164mn after-tax charge on Revolution Wind, the project is now 97% complete and on track for commercial operations later this year, which should lift another overhang for the stock. We update our numbers post 2Q26 results and our PT moves to $82, implying 18% total return.

Improved balance sheet positioning removes overhang and clears a path for growth potential. The closing of the Aquarion Water Company sale in June generated net equity proceeds of ~$1.7 bn, which will be utilized to displace parent-level debt, supporting the balance sheet and advancing the company’s strategic transition into a pure-play T&D utility. Execution here is reflected in its revised credit outlook from negative to stable at Moody’s. The company’s FFO-to-debt metrics remain robust, with S&P at 14.3% and Moody’s at 15.7% as of March 31, 2026, where it’s sitting at 230/270 bps above their respective downgrade thresholds. On the financing front, ES maintained its equity issuance guidance of $800 million to $1.1 billion over the five-year forecast period, with no equity expected to be issued for the remainder of 2026. We believe balance sheet strengthening here addressed an overhang for investors and provided a clearer path to growth moving forward.

Incremental capex opportunities present upside to delivering growth towards the upper half of 5%-7% EPS CAGR by 2028. Management reaffirmed its five-year capital plan of $26.5 billion through 2030 and increased its outlined incremental

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capital from $1bn to $1.7bn. The additional $700mn of capex that management outlined is for a transmission project where the New England ISO has preliminarily selected a joint proposal by Eversource and Avangrid as the preferred solution for its 2025 longer-term transmission planning RFP. ES’s share of this $2.2 bn project is ~$700 mn with targeted in-service by 2032, and ~50% of the capital expected to be deployed within the current five-year planning period. We believe the announcement of this project increased line of sight into capex upside opportunities and provides potential for upside to its earnings growth expectations of delivering growth towards the upper half of their 5%-7% long-term target range annually by 2028.

Improving regulatory environment in Connecticut evidenced by resolution on recovery and key catalysts ahead. PURA issued its final storm cost…