On Friday, BMO Capital Markets adjusted its price target on shares of Eversource Energy (NYSE:ES), increasing it to $66 from the previous $65, while retaining a Market Perform rating on the stock. The adjustment followed Eversource Energy's first-quarter 2024 earnings per share (EPS) report, which met the expectations set by both BMO Capital and the consensus estimate.
Eversource Energy announced an EPS of $1.49 for the first quarter of 2024, aligning with the $1.48 forecast by BMO Capital and consensus figures. Following this announcement, the company's management confirmed their EPS guidance for 2024, projecting a range between $4.50 and $4.67, which compares closely to the $4.55 estimate by BMO Capital and the consensus.
The company also reiterated its commitment to a long-term EPS growth rate of 5-7%, based on the actual 2023 EPS result of $4.34. BMO Capital has chosen to maintain its Market Perform rating for Eversource Energy and has not altered its EPS estimates for the years 2024 through 2026, which stand at $4.55, $4.79, and $5.06, respectively.
The slight increase in the target price to $66 by BMO Capital is attributed to an update in the peer group multiple used in their Sum of the Parts (SOTP) valuation framework. This adjustment reflects the latest market conditions and valuations among Eversource Energy's peers. The firm's analysis and target price suggest a modestly positive outlook for the utility company's stock value in the near term.
InvestingPro Insights
With Eversource Energy's (NYSE:ES) commitment to consistent performance, the InvestingPro data and tips provide a deeper understanding of the company's financial health. Notably, Eversource has a commendable track record of raising its dividend, now for 25 consecutive years, and is expected to continue this trend with a dividend growth of 5.93% over the last twelve months as of Q1 2024. This is a sign of the company's dedication to providing shareholder value and its financial stability to maintain such payments, which should be of great interest to income-focused investors.
Despite some challenges in revenue growth, which saw a decrease of 9.24% over the last twelve months as of Q1 2024, the company's gross profit margin remains strong at 44.05%. Additionally, Eversource Energy's fair value is estimated by analysts to be at $65, while InvestingPro's fair value assessment is significantly higher at $95.23, suggesting potential undervaluation at the current price level of $61.62.
For investors looking for further insights, there are additional InvestingPro Tips available that highlight the company's financial prospects, including the expectation of net income growth this year and predictions of profitability within the same timeframe. To access these valuable insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With more than four additional tips listed on InvestingPro, you can gain a comprehensive understanding of Eversource Energy's investment potential.
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