BOSTON - Eversource Energy (NYSE: NYSE:ES), a major utility company in New England with a market capitalization of $20.94 billion, has acquired a 26-acre site from Constellation Energy (NASDAQ:CEG), aiming to bolster the region's clean energy capabilities and grid reliability. This strategic purchase in Everett, Massachusetts, is poised to serve as a vital interconnection hub for various large-scale renewable energy sources. According to InvestingPro analysis, the company currently operates with a significant debt burden, which investors should monitor as it pursues this expansion.
The Mystic property's existing infrastructure and historical usage make it a potentially significant multi-use energy interconnection point. The site could integrate diverse renewable energy forms, including wind, hydro, battery storage, and nuclear, to support the electrification and reliability needs of major energy consumers in New England. With a current ratio of 0.86 and a debt-to-equity ratio of 1.9, Eversource's financial structure reflects its capital-intensive utility operations. For a deeper understanding of Eversource's financial position and growth potential, InvestingPro subscribers can access comprehensive research reports and detailed financial metrics.
Eversource's Chairman, President, and CEO Joe Nolan highlighted the site's potential to enhance reliability for the entire New England region and contribute to Massachusetts' clean energy transition. Although specific plans for the site are not yet developed, over the next year, Eversource will work with local and state officials, as well as other stakeholders, to create a plan that aligns with the state's decarbonization and electrification objectives.
The acquisition is part of Eversource's broader commitment to a clean energy future in the Northeast, as evidenced by its recognition as the #1 U.S. utility on TIME's List of World's Best Companies for 2024 and its status as the nation's top energy efficiency provider. The company maintains a strong dividend profile, offering investors a significant 5% yield and having raised its dividend for 26 consecutive years. InvestingPro data reveals multiple additional insights about Eversource's financial health and market position, with analysts expecting net income growth this year despite current challenges. The company is actively integrating new clean energy resources into the electrical system, including solar, offshore wind, electric vehicles, and battery storage.
Eversource's purchase of the Mystic property is expected to improve electric grid affordability by addressing future congestion on the regional transmission system and support local economic development. The company is dedicated to a collaborative approach, engaging stakeholders to develop transmission solutions that cater to multiple needs, such as facilitating easier grid connection for renewables and safeguarding access to waterways.
This transaction will not immediately affect customer bills. Eversource serves 1.8 million customers across Massachusetts, providing electricity, natural gas, and water services. The company's workforce of over 10,000 employees is focused on delivering reliable energy and water with superior customer service. Based on InvestingPro's Fair Value analysis, Eversource's stock currently appears to be fairly valued, with analysts setting price targets ranging from $52 to $87 per share.
Information for this article is based on a press release statement.
In other recent news, Eversource Energy experienced a downgrade in its stock rating by Scotiabank (TSX:BNS) to 'Sector Underperform' with a reduced price target of $56.00. The downgrade is attributed to several challenges, including anticipated regulatory interactions and an underperforming base-case earnings per share growth outlook. Scotiabank also expressed concerns about the company's weak balance sheet and recent credit downgrades. In other developments, Eversource Energy announced an amendment to its executive retirement plan and reported a GAAP loss of $0.33 per share in its third-quarter earnings call. The company's recurring earnings per share, however, increased to $1.13 and the full-year 2024 recurring EPS guidance has been updated to $4.52 to $4.60. Eversource also revealed plans to invest nearly $24 billion in infrastructure by 2028. On a separate note, Jefferies initiated coverage on Eversource Energy with an Underperform rating and a price target of $52.00. The firm highlighted potential risks associated with upcoming rate cases, the need for costly credit repair, and construction risks related to offshore wind projects. These recent developments provide insight into the current state of Eversource Energy.
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