Eversource Energy Q3 Earnings Miss Estimates, Revenues Decline Y/Y

Eversource’s Q3 2026 non-GAAP EPS fell 22.7% year over year to $0.92, missing the $0.97 consensus, while revenue declined 7.5% to $2.98 billion and missed consensus by 12.72%. Higher interest costs and weaker distribution results weighed on earnings, though the company raised 2026 EPS guidance to $4.62-$4.70 and reaffirmed its $26.5 billion 2026-2030 capital plan. Regulatory proceedings include a Connecticut rate-case revenue deficiency of $451 million and a requested 11.39% transmission ROE; storm-cost securitization proceeds are intended for debt reduction.

Analysis

The headline miss is less important than the quality and timing of earnings recovery. ES’s regulated model limits the relevance of revenue volatility, but the combination of higher financing costs, Connecticut storm-cost disallowances and a lower transmission ROE shows that rate-base growth is not translating cleanly into near-term shareholder returns. The planned capital build therefore raises execution and funding sensitivity: delayed cost recovery can pressure EPS and credit metrics even if the assets ultimately enter rate base.

The counterweight is that the raised full-year outlook and unchanged growth target may anchor the stock near term. But the recovery path is regulatory-dependent, not yet secured: the requested transmission ROE is not an award, and Connecticut rate relief and storm securitization are 2027 events. Securitization could lower carrying costs if proceeds reduce debt, but timing, approval and final proceeds remain uncertain. The water-sale comparison and gas rate-design timing also make the quarter a noisy basis for extrapolating the run rate.

Near term, guidance may blunt the earnings-miss reaction; over 1–3 months, watch the Nov. 30 transmission rate action and the appeal. Over 6–18 months, the key issue is whether authorized recovery catches up with capex and interest expense. The contrarian risk to a bearish read is that markets may be focusing on quarterly EPS while overlooking eventual rate-base growth; conversely, the capital plan is not itself evidence of accretive returns.

Key Decisions for Investors

• Keep ES underweight versus regulated-utility exposure rather than initiate an outright short solely on this quarter. Consider a small relative-value short ES / long PPL only after PPL’s Nov. 6 report confirms its own earnings trajectory; this is a catalyst trade, not a valuation call.
• For ES, use the Nov. 30 FERC action as the near-term reassessment point. A materially weaker-than-requested outcome or adverse appeal development strengthens the underweight; an improved allowed return and constructive Connecticut rate-case progress would invalidate it.
• Track interest expense, funds-from-operations-to-debt and the timing/terms of storm-cost securitization alongside EPS. If financing costs continue to outrun authorized recovery, reduce exposure; if securitization proceeds are approved and demonstrably directed to debt reduction, reassess the credit and equity pressure.
• Do not treat the $26.5B investment plan or potential incremental projects as upside before approvals and returns are clear. Verify project authorization, funding mix and rate-base inclusion; pause the bearish thesis if guidance is raised again on realized—not merely prospective—regulatory recovery.