Stock Analysis | Eversource Outlook - A Cautionary Technical Picture Amid Mixed Fundamentals

Market Snapshot

Takeaway: Eversource's technicals remain weak with a score of 2.39, while fundamentals and analyst ratings are mixed. Investors should proceed with caution.

News Highlights

Recent developments affecting Eversource include:

• Michigan Utility Partnership: On May 28, 2025, it was reported that Michigan is partnering with major utilities to channel $3.5 billion into local suppliers as part of clean energy expansion. This could support long-term demand for utility infrastructure.
• Electric Hydrogen Project: On May 28, Electric Hydrogen announced a partnership with The Weitz Company for a massive eFuels project, signaling broader clean energy innovation across the U.S. that could indirectly benefit Eversource's energy infrastructure.
• U.S. Visa Policy Changes: On May 28, new U.S. visa rules targeting Chinese students could affect U.S. education and research funding, though the direct impact on Eversource is minimal. However, a broader economic slowdown could affect utility demand.

Analyst Views & Fundamentals

The market is neutral toward Eversource, with a simple average rating of 3.00 and a weighted historical rating of 3.30. Analyst consensus shows consistency, with only one recent rating of "Neutral" from Bank of America Securities (B of A).

Despite the positive sentiment, the current price trend is down (-0.26%), indicating a mismatch between analyst expectations and recent stock performance. This divergence could suggest that fundamentals or market forces are not fully aligned with bullish analyst views.

Key fundamental values and internal diagnostic scores (0-10):

• Revenue-MV: 44.72% of revenue-to-market value (score: 2)
• Price-to-Cash Flow (PCF): 19.07 (score: 0)
• Price-to-Earnings (PE): 56.85 (score: 1)
• Non-current Assets / Total Assets: 91.95% (score: 2)
• Rate of Return on Total Assets: 2.95% (score: 1)
• Long-term Debt to Working Capital: 7.55% (score: 0)
• Cost of Sales Ratio: 31.04% (score: 1)
• Total Assets Turnover Ratio: 0.12 (score: 1)
• Current Assets / Total Assets: 8.05% (score: 1)

Overall, the fundamental score is 2.04, suggesting mixed fundamentals with some strong balance sheet ratios but weak profitability and efficiency metrics.

Money-Flow Trends

Money flows for Eversource over the last five days show a negative overall trend, with large, extra-large, and medium-sized investors all showing outflows. The overall inflow ratio is 48.40%, indicating that slightly more than half of the capital is exiting the stock. Specifically:

• Small investors: 49.68% outflow
• Medium investors: 48.73% outflow
• Large investors: 47.08% outflow
• Extra-large investors: 48.88% outflow

With a fund flow score of 7.78, Eversource's inflow activity is rated as good in our internal diagnostic model. However, the overall negative trend suggests that even with decent retail inflow, institutional selling is driving the stock lower.

Key Technical Signals

Technically, Eversource is struggling, with a score of 2.39 on our internal diagnostic scale. The recent chart patterns include:

• Marubozu White (May 31): Internal diagnostic score of 1.00 (bearish bias)
• Marubozu Black (May 31): Internal diagnostic score of 1.00 (bearish bias)
• MACD Death Cross (July 31): Internal diagnostic score of 1.09 (bearish bias)
• WR Oversold (August 8): Internal diagnostic score of 3.74 (neutral bias)
• Bearish Engulfing (August 8): Internal diagnostic score of 4.33 (bearish bias)

The technical indicators show a clear dominance of bearish signals (6 bearish vs 0 bullish), indicating a weak trend with high risk of further decline. Our model strongly suggests avoiding the stock at this time.

Conclusion

With a weak technical outlook and mixed fundamentals, Eversource appears to be in a precarious position. Investors should consider waiting for a clearer breakout or positive earnings results before committing. Watch for any changes in the utility sector or government energy policy, as these could provide catalysts for a turnaround. Until then, a cautious approach is recommended.