Stock Analysis | Eversource Outlook - Weak Technicals and Mixed Fundamentals Signal Cautious Approach

Market Snapshot

Headline Takeaway: Eversource (ES) is under pressure technically, with bearish signals dominating and a negative momentum outlook.

News Highlights

• Michigan's Energy Policy Shift: Governor Gretchen Whitmer replaced a clean energy advocate with an industry ally on the state's utilities board, potentially influencing the regulatory environment for Eversource, which operates in the region. This change may affect long-term capital planning and energy transition initiatives.
• Global Trade Concerns: Recent news about U.S. tariffs and their potential to cut India’s exports by 40–50% could indirectly affect Eversource, given its exposure to energy markets and global supply chains.
• Industry-Specific: Electric utilities, including Eversource, are expected to invest over $1.1 trillion by 2030 to meet growing demand, according to the Edison Electric Institute (EEI). This hints at strong industry fundamentals but may also mean increased capital expenditures and debt for companies like Eversource.

Analyst Views & Fundamentals

Eversource’s average analyst rating is 3.00, while the weighted rating (based on historical performance) stands at 3.30. Analysts remain consistent in their neutral stance, with no strong divergence in opinions.

However, the price is currently falling (-0.21%), which does not align with the neutral-to-bullish weighted expectations. This mismatch suggests caution for new buyers.

Key fundamental factors and their values:

• PE ratio: 56.85 – high valuation
• PS ratio: 7.10 – elevated sales-to-price
• EV/EBIT: 42.60 – high enterprise value relative to earnings
• Non-current assets / Total assets: 91.95% – heavy long-term asset base
• Long-term debt to working capital ratio: 7.20% – moderate leverage
• Annualized return on total assets: 5.90% – relatively low asset efficiency
• Cost of sales ratio: 31.04% – significant cost burden

Money-Flow Trends

Eversource is seeing negative overall flow trends, with large and extra-large institutional investors pulling money from the stock. The fund-flow score is 7.79 (internal diagnostic score), which is classified as “good.” However, this is at odds with the technical indicators.

• Big-money investors: Holding a 48.9% inflow ratio, but showing a negative trend, suggesting caution.
• Small retail investors: Demonstrating a 50.2% inflow ratio and positive trend, possibly indicating retail optimism or speculative buying.

Key Technical Signals

Eversource’s technical analysis score is 2.29 (internal diagnostic score), signaling weak technicals and suggesting investors should consider avoiding the stock in the near term.

Key technical indicators and their internal diagnostic scores (0–10):

• MACD Death Cross: 2.58 – strong bearish signal as the short-term moving average crosses below the long-term.
• WR Overbought: 1.57 – weak internal strength, indicating overbought conditions are not reliable.
• Marubozu White: 1.00 – bearish signal with poor predictive power.
• Earnings Release Date: 3.99 – marginally positive score, suggesting some short-term optimism around earnings announcements.

Recent Chart Patterns (Aug 1–Aug 6):

• July 25: WR Overbought (bearish)
• August 4: Marubozu White (bearish)
• July 31: MACD Death Cross + Earnings Release Date + Marubozu White (mixed to bearish)

These patterns confirm a negative momentum and indicate poor technical quality over the past five days.

Conclusion

With weak technicals and conflicting analyst and price trends, Eversource is not in a favorable position for new investors. While fundamentals like low cost of sales (31%) and moderate leverage (7.2%) offer some support, the negative money-flow and bearish chart indicators suggest caution.

Actionable Takeaway: Consider waiting for a pull-back or monitoring the next earnings release on July 31 (if not already priced in) for signs of a potential rebound. For now, the stock carries high downside risk and limited upside based on current signals.