Eversource Energy (ES) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: Setup is modestly constructive — consensus Q2 operating EPS of ~$0.89 is a low bar given Q1's substantial beat, but the quarter will be dominated by two non-recurring items (Aquarion sale loss of ~$0.31/share and the residual FERC ROE refund charge) that will obscure the underlying run-rate; the single biggest swing factor is whether management raises full-year 2026 non-GAAP guidance to reflect the Aquarion close and provides an updated transmission ROE outlook.

Heading into Q2 2026, the bar for Eversource is low on a reported basis but the real story is the balance sheet transformation underway. Consensus operating EPS of ~$0.89 is well below the $0.96 reported in Q2 2025, reflecting the loss of Aquarion Water's earnings contribution following the June 30, 2026 close of the $2.4 billion sale — a one-time non-cash charge of ~$115 million ($0.31/share) will hit GAAP results but be excluded from non-GAAP operating EPS. Management's posture on the Q1 call was constructive: the FERC ROE headwind was quantified and absorbed into revised 2026 guidance, the Aquarion sale was on track, and New Hampshire storm securitization legislation was signed — all three overhangs that weighed on the stock through 2025 are now resolving. Estimate revisions have been stable-to-slightly-positive since the Q1 print, with FY2026 operating EPS consensus at ~$4.64 and FY2027 at ~$4.92, consistent with the 5–7% long-term growth target. The stock has outperformed XLU by ~12 percentage points since the Q1 earnings call, suggesting the market has already priced in meaningful execution progress; at current levels (~$75), ES trades at roughly 16x forward earnings, a modest premium to regulated utility peers that reflects improving regulatory visibility. The key wildcard is the FERC Section 205 filing made April 30 proposing an updated transmission ROE of 11.39% — any signal on settlement timing or prospective ROE implementation could meaningfully re-rate the stock, while a delay or adverse development would be the primary downside risk to the 2027 earnings trajectory.

Bar: Low. Q2 operating EPS consensus of ~$0.89 is below the prior-year period ($0.96 in Q2 2025), reflecting Aquarion's absence. A beat on the underlying utility operations is achievable given Q1 momentum.

Guidance/Tone: Management was confident on the Q1 call, characterizing 2026 as a "transformational year." The Aquarion sale closed June 30 — management is likely to update full-year 2026 guidance to reflect the sale proceeds ($1.7B net equity used to retire debt) and may provide a preliminary view on the prospective FERC transmission ROE timeline.

Estimate Trajectory: FY2026 operating EPS estimates have been stable since the Q1 print (~$4.64 current vs. ~$4.64 at Q1 earnings date baseline), suggesting the street has fully absorbed the FERC ROE revision. FY2027 estimates at ~$4.92 imply ~6% growth, tracking the midpoint of the 5–7% long-term target.

Stock Setup: ES has rallied ~11.5% since the Q1 earnings call vs. XLU flat and SPY flat, driven by Aquarion sale resolution and storm securitization progress. At ~$75, the stock is near the high end of the analyst price target range ($60–$79 consensus), leaving limited room for multiple expansion without a positive guidance revision.

Wildcard: The FERC Section 205 transmission ROE filing (April 30, 2026, proposing 11.39% vs. current 9.57%) — any update on settlement progress or prospective implementation timeline could be the most significant earnings call catalyst, as management indicated a guidance update for the prospective ROE is expected on the Q4 2026 call.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus Q2 operating EPS of ~$0.89 is a low bar relative to Q1's $1.73 beat, but Q2 is seasonally the weakest quarter for a New England utility; the bigger swing factor is whether management updates full-year 2026 guidance upward following the Aquarion close and provides color on the FERC ROE prospective rate timeline.

Table 1 — Q2 2026 Current Quarter Snapshot

Source: Visible Alpha consensus and actuals data. Operating EPS excludes the ~$0.31/share non-cash Aquarion sale loss and FERC ROE refund charge. Q2 2026 revenue consensus of $2.919B reflects the absence of Aquarion Water revenue following the June 30, 2026 close. CapEx consensus of $1.391B for Q2 reflects back-half weighting of the $4.94B FY2026 plan.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Top 2 KPIs: Operating EPS (Non-GAAP) and Total Revenues

Pattern: ES has beaten operating EPS consensus in 7 of the last 8 quarters, with the sole miss in Q1 2025 (−1.7%); revenue beats are less consistent (5 beats, 3 misses over 8 quarters), reflecting the lumpiness of regulatory cost recovery timing. The EPS beat pattern is strong and consistent, suggesting management guides conservatively.

3. Guidance & Commentary Evolution

Key Takeaway: The most significant post-Q1 development is the June 30, 2026 close of the Aquarion Water sale ($2.4B total, ~$1.7B net equity proceeds used to retire debt) — management is likely to update FY2026 non-GAAP guidance on the Q2 call to reflect the sale's earnings impact and the debt reduction benefit; the FERC transmission ROE remains the key unresolved variable, with a guidance update deferred to the Q4 2026 call.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: FY2026 and FY2027 operating EPS estimates have been remarkably stable since the Q1 print, suggesting the street has fully absorbed the FERC ROE headwind and Aquarion sale impact; the gap between current consensus ($4.64 FY2026) and the long-term growth trajectory implies estimates are tracking guidance, with upside optionality from a higher prospective FERC ROE not yet in numbers.

Source: Visible Alpha consensus and actuals data. Operating EPS estimates are remarkably stable post-Q1 print, confirming the street has fully digested the FERC ROE revision. The modest upward revision to FY2026 revenue consensus (+3.9% since Q1 earnings) likely reflects updated regulatory cost recovery assumptions. CapEx consensus has drifted slightly below the implied annual run-rate of the 5-year plan, consistent with management's commentary about potential transmission CapEx flexibility.

5. Stock Performance

Key Takeaway: ES has outperformed XLU by ~12 percentage points since the Q1 2026 earnings call (May 7, 2026), driven by regulatory overhang resolution (Aquarion sale close, NH storm securitization legislation) rather than estimate revisions, which have been flat; the stock's re-rating from ~$67 to ~$75 reflects multiple expansion on improving regulatory visibility, not earnings upgrades.

ES vs. XLU (Utilities ETF) vs. S&P 500 (SPY) — Indexed to 100 at Q1 2026 Earnings Date (May 7, 2026). Source: Yahoo Finance.

• ES +11.5% since Q1 earnings (May 7 close: $67.04 → July 28 close: $75.39), vs. XLU −0.5% and SPY −0.3% over the same period — a ~12 ppt outperformance vs. the sector ETF.
• Key driver: Regulatory overhang resolution. The Aquarion sale closed June 30 ($2.4B total, $1.7B net equity proceeds), the NH storm securitization bill was signed into law, and the CT RAM decision in April authorized a $100M storm cost reserve. These events removed three of the four major overhangs that had weighed on the stock.
• Estimate revisions: FY2026 operating EPS consensus has been flat at ~$4.64 since the Q1 print, confirming the rally is multiple-driven, not earnings-driven. The stock re-rated from ~16x to ~16.5x forward earnings.
• Analyst sentiment: Consensus is Hold (12 analysts: 3 Buy, 6 Hold, 3 Sell). Average price target ~$71.70, implying ~4.5% downside from current levels. Wells Fargo (Overweight) raised PT to $76 on July 2; BMO Capital (Market Perform) cut PT to $72 on July 22; Argus Research downgraded to Hold on June 12 (no PT assigned).
• Sector ETF: XLU (Utilities Select Sector SPDR) used as the sector benchmark — appropriate for ES as a regulated electric and gas utility. XLU has been essentially flat since the Q1 earnings date, underperforming ES significantly.

6. Material News & Developments

Key Takeaway: The Aquarion Water sale closing on June 30, 2026 is the most significant post-Q1 development — the $1.7B net equity proceeds used to retire debt materially improves the balance sheet and FFO/debt trajectory, and management is expected to update FY2026 guidance on the Q2 call to reflect this.

• June 30, 2026 — Aquarion Water Sale Closed (8-K Filed): Eversource completed the sale of Aquarion Water Company to Aquarion Water Authority (a quasi-public CT corporation) for $2.4B in cash. Net equity proceeds of ~$1.7B will be used to retire Eversource debt. A non-cash after-tax charge of ~$115M ($0.31/share) will be recognized in Q2 2026 GAAP results but excluded from non-GAAP operating EPS. This closes the book on a multi-year regulatory saga (PURA initially rejected the sale in November 2025, Superior Court ruled in January 2026, PURA granted final approval March 25, 2026, denied reconsideration April 30, 2026). Implication: Significant balance sheet positive; debt retirement improves FFO/debt and reduces equity issuance urgency; management likely to update FY2026 guidance on Q2 call.
• April 30, 2026 — FERC Section 205 Filing (Prospective Transmission ROE): Eversource filed with FERC proposing an updated transmission base ROE of 11.39% (vs. current 9.57% set by FERC's March 19, 2026 order) and raising the ROE cap on transmission investments to 12.89%. New rate expected to be implemented toward end of 2026 on a subject-to-refund basis within ~7 months of filing. Settlement process expected to begin within 60 days of filing, involving consumer advocates and AG offices from all six New England states. Implication: If settlement is reached at or near the proposed 11.39%, this would be a meaningful positive catalyst for 2027+ earnings; current guidance assumes 9.57%.
• April 22, 2026 — Connecticut RAM Decision: PURA issued a constructive RAM (Rate Adjustment Mechanism) decision authorizing a $100M reserve for storm restoration costs and approving use of forecast data for TPA rates. This lowers customer rates while improving cash flow predictability for Eversource. Implication: Positive for near-term cash flow and regulatory relationship in Connecticut.
• April 14, 2026 — FERC ROE Stay Filed at D.C. Circuit: Eversource filed a motion for stay at the U.S. Court of Appeals for the D.C. Circuit (following an April 2 motion at FERC) challenging the March 19 FERC order reducing New England transmission base ROE from 10.57% to 9.57%. FERC granted an extension of the refund deadline to May 2027. Rehearing request filed April 20. Implication: Legal challenge preserves optionality; refund deadline extension reduces near-term cash flow pressure.
• July 22, 2026 — BMO Capital Cuts PT to $72 (Market Perform): BMO analyst James Thalacker lowered price target from $73 to $72, maintaining Market Perform. Likely reflects limited upside at current levels (~$75) ahead of earnings. Implication: Modest negative signal from a neutral-rated analyst; stock is trading above the revised PT.
• July 2, 2026 — Wells Fargo Raises PT to $76 (Overweight): Wells Fargo analyst Shahriar Pourreza raised price target from $75 to $76, maintaining Overweight. Likely reflects confidence in Aquarion sale close and storm securitization progress. Implication: Positive signal from the most bullish major analyst; PT of $76 is near current trading levels.
• June 12, 2026 — Argus Research Downgrades to Hold: Argus analyst Marie Ferguson downgraded ES from Buy to Hold without assigning a price target. Downgrade came after the stock's strong run post-Q1 earnings. Implication: Valuation-driven downgrade; suggests limited near-term upside at current levels in the view of at least one previously bullish analyst.
• May 2026 — CL&P Rate Case Letter of Intent Filed: Eversource filed a letter of intent with PURA for the first CL&P (Connecticut Light & Power) rate review in approximately eight years. This is a key catalyst for the 2028 earnings inflection management has highlighted. Implication: Rate case filing initiates a multi-year process; constructive outcome would support the upper half of the 5–7% long-term growth target.
• February 2026 — Junior Subordinated Notes Issued: Eversource issued junior subordinated notes (JSNs) that were more than 5x oversubscribed and are trading at or above par. This alternative financing tool reduces near-term common equity issuance needs. Implication: Demonstrates strong capital market access; reduces equity dilution risk.

7. Insider Transaction Activity

Key Takeaway: Insider activity since the Q1 earnings call is minimal and not alarming — one small open-market purchase by a trustee (IRA account) and one 10b5-1 planned sale by the General Counsel; neither transaction is large enough to signal a directional view on the stock.

Source: SEC Form 4 filings. No clustered buying or unusual sale activity. The trustee's small open-market purchase the day after Q1 earnings is a modestly positive signal. The General Counsel's 10b5-1 sale is pre-planned and obligation-driven, not indicative of a negative view. Overall, insider activity is quiet and unremarkable heading into Q2 earnings.

8. Peer Commentaries — Read-Through

Key Takeaway: Peer Q2 2026 earnings calls (FirstEnergy, Entergy, CenterPoint, WEC, DTE) and the Entergy June 2026 Investor Day collectively reinforce three themes directly relevant to ES's Q2 print: (1) data center and industrial load growth is accelerating across the sector, validating ES's load growth investment thesis; (2) regulated utilities with constructive regulatory frameworks are earning at or near allowed ROEs, a positive read-through for ES's improving Connecticut and Massachusetts regulatory relationships; and (3) credit metrics and FFO/debt ratios are a sector-wide focus, with peers targeting 13–15%+ FFO/debt — ES's improving trajectory is consistent with sector norms.

Theme 1: Load Growth & Data Center Demand — Sector-Wide Acceleration

Read-through relevance: ES management has been more cautious than peers on data center load additions (citing affordability concerns for existing customers), but the sector-wide demand surge validates the underlying load growth investment thesis and supports ES's 2% weather-normalized growth narrative.

• FirstEnergy (FE) — Q2 2026 Earnings Call (July 29, 2026): "Total forecasted data center demand has increased 30% since the first quarter to approximately 25GW, and during the second quarter alone, we contracted an additional 2.1GW, bringing our total contracted demand to 6.4GW." Total customer load increased ~2% in Q2 on a weather-adjusted basis, with industrial load up over 4%. Read-through: 2% weather-adjusted load growth is directly comparable to ES's reported 2% weather-normalized growth; FE's data center pipeline acceleration confirms the demand environment is robust.
• Entergy (ETR) — Q2 2026 Earnings Call (July 29, 2026): "Excluding weather, retail sales growth was positive, driven by 10% industrial sales growth as new and expansion projects continue to ramp up their operations." ETR maintains 7–12GW of hyperscale data center potential in its pipeline. Read-through: Double-digit industrial load growth at ETR underscores the strength of the electrification and data center demand cycle; ES's New England service territory (biotech, universities, research institutions) is a different demand profile but benefits from the same macro tailwind.
• CenterPoint Energy (CNP) — Q2 2026 Earnings Call (July 28, 2026): "The 14GW of projects eligible for batch zero would represent over 65% increase in our system's peak demand." CNP increased its capital investment plan by $800M to support system upgrades for large load customers. Read-through: CNP's capital plan increase driven by load growth is a positive read-through for ES's $26.5B 5-year CapEx plan; utilities with strong load growth are being rewarded with higher capital deployment opportunities.
• WEC Energy Group (WEC) — Q2 2026 Earnings Call (July 29, 2026): "Our five year capital plan includes $37.5 billion of projected investments... by the end of 2030, we expect approximately 15% of our asset base to be dedicated to these very large customers." Microsoft's first data center in Pleasant Prairie is fully operational; Vantage/Oracle site progressing with 1.3GW in WEC's 5-year forecast. Read-through: WEC's execution on large load customer infrastructure demonstrates that regulated utilities can successfully integrate data center demand while protecting existing customers — a model ES is watching closely.
• DTE Energy (DTE) — Q2 2026 Earnings Call (July 28, 2026): "We have 2.4GW of executed agreements... The 1.4GW Oracle agreement is approved and included in our plan, and construction is underway." DTE sees 5–6GW of additional opportunities. Read-through: DTE's data center contracting success and capital plan execution ($11B 5-year plan) is a positive sector read-through; DTE's FFO/debt target of ~15% is consistent with ES's improving trajectory.

Theme 2: Regulatory Environment — Constructive Outcomes Across the Sector

Read-through relevance: ES's improving Connecticut regulatory relationship (new PURA commissioners, constructive RAM decision, CL&P rate case filing) is consistent with a broader sector trend of constructive regulatory outcomes, particularly for utilities with strong reliability track records.

• PPL Corporation (PPL) — Q1 2026 Earnings Call (May 8, 2026): PPL's Pennsylvania rate case settlement was approved by ALJs without modification (April 17), with new rates effective July 1 and less than 4% bill increases despite a 10-year stay-out. PPL also noted the ISO-New England transmission ROE reduction: "Our refunds are around $25–26 million... we kind of live and die together as a group up there, just filed a 205 filing for higher ROEs going forward." Read-through: PPL's constructive PA rate case outcome is a positive read-through for ES's pending CL&P rate case; PPL's confirmation that New England TOs filed a joint Section 205 for higher ROEs validates ES's FERC strategy and suggests a coordinated approach to the prospective ROE resolution.
• Entergy (ETR) — Investor Day (June 9, 2026): "In the regulatory space, we have partnered with our commissions to ensure that we have what we need to create economic development in our states... we expect our utilities collectively to earn roughly equal to their allowed ROEs." ETR highlighted structural changes in Louisiana and Texas enabling faster storm cost recovery. Read-through: ETR earning at allowed ROEs across all jurisdictions is a positive sector signal; ES's improving Connecticut regulatory relationship and the constructive RAM decision suggest a similar trajectory is achievable.
• WEC Energy Group (WEC) — Q1 2026 Earnings Call (May 5, 2026): Wisconsin PSC approved WEC's Very Large Customer (VLC) tariff on April 24, ensuring data centers pay their full share of costs. WEC filed a rate case for forward-looking test years 2027–2028 with modest electric rate increases of 4.7% and 4.5%. Read-through: WEC's VLC tariff approval demonstrates that regulators are willing to create constructive frameworks for large load customers; ES's opposition to data center additions (citing affordability) may evolve as the regulatory toolkit develops.
• Ameren (AEE) — Q1 2026 Earnings Call (May 6, 2026): S&P affirmed Ameren's BBB+ credit rating and stable outlook in April 2026. AEE is advancing a Missouri electric rate case filing in mid-2026 and expects to file additional CPCN requests for ~3GW of new generation. Read-through: S&P's affirmation of AEE's credit rating (consistent with S&P's reaffirmation of ES's ratings post-FERC decision) suggests rating agencies are comfortable with regulated utility credit profiles despite the higher capital investment environment.

Theme 3: Credit Metrics & Balance Sheet — FFO/Debt a Sector-Wide Focus

Read-through relevance: ES's FFO/debt improvement story (400+ bps improvement through 2025, targeting at least 100 bps cushion over downgrade thresholds) is consistent with sector-wide focus on credit metrics; peer targets of 13–15%+ FFO/debt suggest ES's FY2026 consensus of ~12.9% is approaching but not yet at sector-leading levels.

• Entergy (ETR) — Q2 2026 Earnings Call & Investor Day: "Our plan reflects FFO to debt at or above 15% throughout the outlook period for Moody's metric, giving us capacity to manage events in the business as they occur." ETR closed 2025 with the highest FFO/debt on a Moody's basis in the industry. Read-through: ETR's 15%+ FFO/debt target is above ES's current trajectory (~12.9% FY2026 consensus); ES's storm securitization proceeds (~$2B combined CT+NH) are the key catalyst to close this gap.
• DTE Energy (DTE) — Q2 2026 Earnings Call: "We remain focused on maintaining our strong investment grade credit rating and solid balance sheet metrics as we target an FFO to debt ratio of approximately 15%." DTE is issuing $500–$600M of equity annually through 2028. Read-through: DTE's 15% FFO/debt target and disciplined equity issuance program is a useful benchmark; ES's alternative financing approach (JSNs, minority interest structures) is a differentiated strategy to achieve similar credit metrics with less equity dilution.
• CenterPoint Energy (CNP) — Q2 2026 Earnings Call: "Our adjusted FFO to debt ratio based on Moody's rating methodology was 13.4% [as of Q2 end]. This represents a nearly 100 basis point improvement from Q1." CNP expects to fund incremental investments without issuing additional equity. Read-through: CNP's 13.4% FFO/debt is comparable to ES's trajectory; CNP's ability to fund incremental CapEx without equity issuance (supported by tax refunds and asset sales) mirrors ES's strategy of using Aquarion proceeds and storm securitization to reduce equity needs.
• PPL Corporation (PPL) — Q1 2026 Earnings Call: "We continue to maintain one of the strongest credit ratings in our sector with a balance sheet that provides the company with significant financial flexibility." PPL executed a $1.15B equity units offering in February 2026, derisking ~2/3 of total equity needs. Read-through: PPL's proactive equity financing (equity units, ATM) is a positive read-through for ES's JSN issuance strategy; both companies are using alternative equity-like instruments to reduce dilution while maintaining credit metrics.
• FirstEnergy (FE) — Q2 2026 Earnings Call: "Our financial performance resulted in a consolidated return on equity of 9.5% in line with our targeted returns." FE reaffirmed its $6B 2026 capital investment plan and 6–8% core earnings growth near the top end through 2030. Read-through: FE's 9.5% consolidated ROE is below ES's allowed ROEs in most jurisdictions; FE's transmission business growing at 16% CAGR through 2030 highlights the value of transmission investment — a key reason ES is fighting to restore a higher FERC transmission ROE.

Peer Read-Through Summary

Note: All peer commentary sourced from earnings call transcripts and investor day presentations from the last 60 days (May–July 2026). Only commentary relevant to ES's Q2 2026 reporting period and current quarter outlook is included. Prior-quarter results commentary from peers has been excluded.

Disclosures & Sources

Financial data sourced from Visible Alpha consensus and actuals database. Stock price data sourced from Yahoo Finance. Insider transaction data sourced from SEC Form 4 filings. Peer commentary sourced from earnings call transcripts and investor day presentations. Company-specific information sourced from Eversource Energy SEC filings (8-K dated June 30, 2026), Q1 2026 earnings call transcript (May 7, 2026), and company press releases. Analyst ratings and price targets sourced from public research aggregators. This document is prepared for informational purposes only and does not constitute investment advice.