Courtesy of Benzinga.
Eversource Energy (NYSE: ES) is attractively valued and remains poised for 12-percent upside from current levels, according to a Morgan Stanley analyst.
The Analyst
Morgan Stanley analyst Devin McDermott upgraded shares of Eversource Energy from Equal-weight to Overweight and upped the price target from $70 to $72.
The company is one of the analyst’s top large-cap regulated picks into 2018.
The Thesis
Eversource Energy stock gives no credit for the $1.6-billion Northern Pass Transmission, or NTP, project and values the core utilities at a discount, McDermott said in a Wednesday note. The low end of the company’s 5-7 percent growth guidance is achievable even without NTP, McDermott said.
The analyst sees potential upside even without Northern Pass, and considers the project a “free option,” worth up to $5 to $5.50 per share if it is completed.
The core utilities deserve a premium, given constructive regulatory relationships, a high-quality balance sheet, strong management team, limited exposure to tax reform and long-term growth driven by New England clean energy policies, according to Morgan Stanley.
The Price Action
The shares of Eversource Energy are up over 16 percent year-to-date.
Related Links:
Best Sector ETFs For September: Playing It Safe
With Utilities Valuations Looking Full, Which Names Are Still A Buy?
Latest Ratings for ES
Date | Firm | Action | From | To |
---|---|---|---|---|
Dec 2017 | Morgan Stanley | Upgrades | Equal-Weight | Overweight |
Nov 2017 | Morgan Stanley | Maintains | Equal-Weight | |
Oct 2017 | Morgan Stanley | Maintains | Equal-Weight |
View More Analyst Ratings for ES
View the Latest Analyst Ratings
Posted-In: Devin McDermott Morgan StanleyAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga