ES – Market expectations are for Uniform ROA to expand, but management may have concerns about EPS, acquisitions, and the South Fork Project

• Eversource Energy (ES:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 42.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns hitting their EPS targets, their NESC acquisition, and their South Fork Project.
  
  
• Specifically, management may have concerns about the impact of customer credits and penalties on their earnings per share, storm-related expenses in their Electric Distribution business, and the environmental impact of their South Fork Project. Also, they may be exaggerating the benefits of Providence, Rhode Island as a center for foundation construction, opportunities in the water delivery business, and the potential of the New England Service Company (NESC) acquisition. Moreover, management may lack confidence in their ability to meet the completion target for the South Fork Project, achieve their long-term EPS growth rate target, and maintain their high standards of providing customer service. Finally, they may have concerns about the government’s focus on bringing more clean energy resources to the market.