There’s an under-the-radar utility stock on Josh Brown’s list that’s ready to break out
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — We use these Thursday columns to put the spotlight on individual names from the Best Stocks in the Market list that perhaps you’ve never heard of. Sometimes we’ll tackle the story of a well-known company that readers haven’t revisited for a while. The research that goes into these pieces serves a dual purpose — Sean and I get a chance to focus on the names driving the market higher for our own information, and you end up with a trading or investing idea that may not have occurred to you. Everyone wins. Let’s talk about today’s subject, Eversource Energy (ES) , a New England-based regulated gas transmission and electrical utility that traces its roots back to a predecessor that was called the Hartford Electric Light Company in 1878 — the same year Edison was busy developing the light bulb. The company was known as Northeast Utilities since being formally assembled in 1966 and then became Eversource in 2015 after merging with NSTAR. Serving Connecticut, New Hampshire and Massachusetts, it was the first new multi-state public utility created since the New Deal a hundred years ago. We’re writing about ES today because it looks to be on the verge of a breakout. There’s an earnings report coming out today after the close that could serve as the trigger if it’s a good one. The conference call won’t be till tomorrow morning at 9am. Sean will get you ready with the fundamentals and I will be back with the risk management section. Best Stock Spotlight: Eversource Energy (ES) Sean — We covered a slate of electric utilities back in February when the sector spotlight featured NextEra, Duke and FirstEnergy and the utility trade has been slow-moving since with the XLU down 3%. The story is similar here in that electricity demand is growing again for the first time in two decades. The companies that own the wires get paid a regulated return on every dollar they invest to meet it. The data centers and EV drivers are not unplugging their devices anytime soon. Eversource is the largest regulated utility in New England, delivering electricity and natural gas to approximately 4.6 million customers across Connecticut, Massachusetts and New Hampshire with $64 billion in total assets. ES owns the transmission and distribution infrastructure that moves power. The stock is up 11.2% over the past three months and 20.9% over the past year, but over the trailing five years ES compounded at just 1.3% annually while peers like Duke (8.2%), PPL (8.7%), and Xcel (6.5%) ran well ahead of it. This was the laggard of the group, weighed down by an offshore venture that produced a $1.26 per share net loss in fiscal 2023. Management sold out of offshore wind entirely, EPS recovered to $2.27 in 2024, and then to $4.56 GAAP in 2025. The cleanup is now essentially complete. On June 30, Eversource closed the sale of Aquarion, a water utility ES owned, making it a pure-play regulated electric and gas company. The forward story is a capex story. Eversource is planning $26.5 billion of investment from 2026 through 2030 — $11.2 billion in electric distribution, $7.2 billion in transmission and $6.8 billion in gas. Massachusetts regulators approved the company’s “Electric Sector Modernization Plan” targeting a 180% increase in electrification investment, enough for 2.5 million EVs and 1 million residential heat pumps statewide. New England electricity consumption is projected to grow 15% by 2035 and 50% by 2045. Those Patriot fans have to keep the lights on! Regulators recently cut the base return on equity for New England transmission owners from 10.57% to 9.57% earlier this year, roughly a $70 million annual after-tax hit, which forced Eversource to revise 2026 non-GAAP EPS guidance down to $4.57–$4.72 from $4.80–$4.95. The company absorbed a $43.9 million after-tax charge in Q1 and yet ES still beat, posting $1.73 in non-GAAP EPS against a $1.59 consensus. Management is guiding to 5–7% EPS growth through 2030, targeting the upper half of that range by 2028. Investors are getting ES at roughly 16x forward earnings with a 4.2% dividend yield (the dividend was raised 5% this year to $3.15 annualized). ES trades at a discount to where premium regulated utilities have re-rated the past few years, with improving earnings metrics. Eversource reports Q2 earnings today after the close with a conference call to follow tomorrow. The Street expects around $3 billion in revenue (up 5% year over year) and $0.90 in EPS, down year-over-year as the regulators’ ROE cut flows through (this is priced in). The things to watch are any update to full-year guidance and progress on earnings continuing to compound. The price action over the past three months suggests the market has already made up its mind about the direction of this business. As management continues to prove themselves, multiples are coiled to go higher. Risk management Josh — Third time’s the charm? This one’s pretty simple. You have to ask yourself if the stock is likely to roll over at these levels again or finally break through. Eversource spent the better part of the spring and early summer in a wide, sideways channel, grinding between roughly $66 and $72 while the 200-day continued its long climb higher. That patience paid off. On June 24, the stock cleared $71 decisively, breaking out of that multi-month range and stepping into a fresh leg higher. It hit $75 this week, a level it has tested and failed twice in the last year. Long-time readers of this column know I do not believe in triple tops. It’s not impossible for ES to fail here again, I just think it’s improbable. The next test is right here, at the double-top highs in the mid $70s. RSI is sitting at 57, which tells you this move has not gotten ahead of itself. Momentum is constructive without being stretched, and that leaves room for the stock to continue working higher without needing to digest a crowded tape first. This is the kind of reading you want to see after a clean breakout: confirming, not euphoric. Traders can use $71 as their line in the sand, which was both the breakout level from late June and where the rising 50-day is now resting. Investors can give it more room, with $66 as the relevant support, the lower bound of the March through June congestion channel. That level has now been tested by time rather than by a sharp selloff, which gives it more weight as a base. Below $66 and the uptrend is broken, we’d be out and off to a new adventure. 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