Stock Analysis | Eversource Outlook - Cautious Technicals, Mixed Analysts, and Strong Fund-Flow Signals

Market Snapshot

Eversource (ES) is facing a weak technical outlook with a cautious stance from our internal diagnostic model, scoring 4.32 out of 10. The stock has seen a recent price drop of -3.06%, and while market sentiment remains neutral, technical signals are conflicting and scarce.

News Highlights

Recent news points to global infrastructure growth, with key developments in energy and construction markets:

• Toyota’s $792 million investment in a battery electric vehicle plant in the Czech Republic highlights growing demand for clean energy solutions—potentially a positive signal for energy utilities like Eversource.
• Essential Utilities Inc. is expanding its data center footprint in Pennsylvania, indicating increased reliance on stable energy and water infrastructure—another tailwind for Eversource’s core utilities business.
• San Diego Gas & Electric is building a new 500-kV transmission line in California, signaling growing demand for energy infrastructure investments, which may indirectly support Eversource's operations.

Analyst Views & Fundamentals

Analyst coverage remains limited, with only one active analyst—Julien Dumoulin-Smith from B of A Securities—issuing a Neutral rating in the last 20 days. Despite this, the analyst has a 100% historical win rate and an average return of -0.76% for its recent forecasts. The simple average rating is 3.00, while the performance-weighted average is 2.08, indicating a generally cautious outlook.

On the fundamental side, Eversource shows a mixed picture with an overall internal diagnostic score of 1.77. Key metrics include:

• Revenue-to-Market Cap Ratio (Revenue-MV): 0.45 → internal score: 2.00 (mildly bearish)
• Price-to-Book (PCF): 19.07 → internal score: 0.00 (weak)
• Price-to-Sales (PS): 7.10 → internal score: 1.00 (modest)
• Price-to-Earnings (PE): 56.85 → internal score: 1.00 (expensive relative to earnings)
• Gross Profit Margin (GPM): 71.15% → internal score: 1.00 (solid, but not outperforming peers)
• Non-Current Assets / Total Assets: 91.95% → internal score: 2.00 (high leverage of long-term assets)

Money-Flow Trends

Eversource is currently receiving strong inflows from institutional and large-cap investors. The fund-flow score is 7.74 (good), with inflow ratios across all sizes trending negatively (i.e., more outflows than inflows). However, the block inflow ratio stands at 47.38%, suggesting large investors are still accumulating the stock, despite the overall bearish price trend.

Key Technical Signals

The technical outlook is mixed, with a weak technology, need to be cautious signal. Here are the key technical indicators and their internal scores:

• Long Lower Shadow: internal score: 7.33 (suggests a potential reversal to the upside)
• WR Oversold: internal score: 3.70 (overbought conditions historically have mixed returns)
• Bullish Engulfing: internal score: 2.58 (a strong buy signal, but historically underperforming)
• Marubozu White: internal score: 1.00 (bearish signal with historically poor performance)
• Hanging Man: internal score: 7.00 (bearish reversal pattern with decent historical win rate)

Recent Chart Patterns (Last 5 Days):

• August 12: Hanging Man pattern (bearish reversal)
• August 26: Bullish Engulfing pattern (bullish reversal)
• August 25: Long Lower Shadow (potential bullish reversal)
• August 19: Marubozu White (bearish continuation)
• August 18: WR Oversold (overbought signal)

Overall, the key technical insight is that the market remains in a volatile and directionless phase, with mixed signals from bullish and bearish candlestick patterns. Investors are advised to closely watch price actions and volume changes.

Conclusion

Eversource is in a mixed technical and fundamental environment, with strong inflows from large investors but conflicting short-term technical signals. Given the weak technical score of 4.32 and the mixed analyst ratings, we recommend caution in the near term. Investors may want to wait for a clearer trend formation before making new entries. However, the high fund-flow inflow ratios suggest some long-term confidence remains in the stock.