Eversource Energy raised to Buy at BofA on improving regulatory tone

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Eversource Energy (NYSE:ES [https://seekingalpha.com/symbol/ES]) +0.5% in Tuesday's trading as Bank of America upgraded shares to Buy from Neutral and raising its price target to $85 from $73, seeing an improving regulatory tone across the company's key jurisdictions, a path to balance sheet clarity, and a ~6% earnings per share growth through 2029 driving total return potential.

BofA analysts led by Ross Fowler said Connecticut is showing signs of a regulatory reset, pointing to the implementation of SB 4, which expands the state's Public Utilities Regulatory Authority to five commissioners and allows storm cost securitization for utilities, and the departure of former Chair Marissa Gillett, who had taken a tougher stance toward utilities in the past.

On October 20, Connecticut Governor Lamont nominated four new commissioners, which BofA said will bring a more balanced and technically experienced PURA and signaling a shift toward stability in future proceedings.

With Revolution Wind largely de-risked and the Aquarion sale and expected storm cost recovery set to resolve more than $3 billion in deferred items, Eversource (NYSE:ES [https://seekingalpha.com/symbol/ES]) is nearing a cleaner balance sheet and improved funding flexibility, the analysts said, which should ease regulatory overhangs and position the company for steadier rate base growth and greater long-term earnings visibility.

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