Stock Analysis | Eversource Outlook - Bearish Technicals, Mixed Fundamentals, and Neutral Analyst Outlook

1. Market Snapshot

Takeaway: Eversource (ES) is currently trading down by 1.40%, with weak technicals and a bearish bias from key indicators suggesting caution for potential buyers.

2. News Highlights

• Michigan's $3.5B Clean Energy Investment: Michigan has announced a partnership with major utilities to channel billions toward in-state clean energy suppliers, potentially benefiting Eversource given its presence in regional energy infrastructure. While direct exposure is unclear, the broader industry tailwind could offer some support.
• Electric Ferry Projects in Canada: The news of electric ferries being built for BC Ferries highlights a growing global shift toward electric transportation. While Eversource is not directly involved in this project, the broader theme of electrification may align with its clean energy initiatives and long-term strategy.
• Global Shift Toward Electric Vehicles: Governments around the world are taking steps to promote EVs, including a proposed levy on gas-powered cars in Pakistan and similar trends in the U.S. These developments support long-term utility and infrastructure stocks that are investing in renewable and clean energy solutions.

3. Analyst Views & Fundamentals

Eversource has received a recent Neutral rating from B of A Securities analyst Julien Dumoulin-Smith, who has a strong historical performance record (100% win rate over the last 20 days). The simple average analyst rating is 3.00, while the performance-weighted rating is slightly higher at 3.30, indicating consistent but not overly enthusiastic analyst expectations.

These ratings are relatively neutral compared to Eversource's recent 1.40% price decline, suggesting a mismatch between analyst expectations and current price action. The fundamental score is 2.74, signaling weaker fundamentals. Key factors:

• Price-to-Cash Flow (PCF): 19.07 - Internal diagnostic score: 0.00 (lowest possible). This suggests poor value based on cash flow.
• Price-to-Earnings (PE): 56.85 - Internal diagnostic score: 1.00. Very high valuation, potentially deterring growth investors.
• Basic Earnings Per Share (YoY growth rate): 0.82% - Internal diagnostic score: 3.00. Slight positive earnings growth, but not impressive.
• Cost of Sales Ratio: 31.04% - Internal diagnostic score: 1.00. Suggests moderate cost pressures.
• Current Assets / Total Assets: 8.05% - Internal diagnostic score: 2.00. Indicates a relatively low proportion of liquid assets.
• Long-Term Debt to Working Capital Ratio: 7.24% - Internal diagnostic score: 0.00. Signals high leverage risk.
• Net Profit / Total Profit: 76.69% - Internal diagnostic score: 1.00. Strong net profit margin, but not sufficient to offset other weak fundamentals.

4. Money-Flow Trends

Eversource has seen negative inflow trends across all major investor categories. The fund-flow score is 7.8, indicating a “good” score in terms of model interpretation, but this likely reflects the broader market environment rather than strong demand for the stock itself. Inflow ratios are consistently below 50% for all investor categories, suggesting a lack of investor enthusiasm:

• Small investors: 49.85% inflow ratio (negative trend)
• Medium investors: 48.62% inflow ratio (negative trend)
• Large investors: 47.05% inflow ratio (negative trend)
• Extra-large investors: 49.12% inflow ratio (negative trend)

These patterns suggest that both retail and institutional investors are staying cautious or even reducing their exposure to Eversource amid bearish technical signals and mixed fundamentals.

5. Key Technical Signals

Eversource’s technical profile remains weak, with a technical score of 3.49 and a recommendation to avoid the stock. Over the last five days, key bearish indicators have dominated:

• Marubozu Black: Internal diagnostic score: 1.00 - A strong bearish candle pattern observed on August 6.
• MACD Death Cross: Internal diagnostic score: 1.09 - A bearish signal indicating the 12-period moving average has crossed below the 26-period line (observed on July 31).
• Marubozu White: Internal diagnostic score: 1.00 - A bullish candle pattern observed on both July 31 and August 4, but not strong enough to offset bearish momentum.

The Hanging Man pattern was observed on August 12 and carries the highest internal diagnostic score of 7.72, indicating a potential short-term reversal. However, this has not yet translated into a sustained upward move, and bearish momentum remains dominant. With 5 bearish indicators versus just 1 bullish one, the chart remains heavily skewed to the downside.

6. Conclusion

Eversource (ES) faces a challenging short-term outlook with weak technical signals, mixed analyst expectations, and negative fund flows. While the Hanging Man pattern hints at a potential short-term bounce, the overall trend remains bearish with a technical score of 3.49. Investors are advised to consider waiting for a clearer reversal signal or pull-back before entering positions. In the meantime, the broader shift toward clean energy and electric infrastructure could offer long-term support, but patience will be key in the near term.