Delayed Projects Might Mean Eversource Energy Consensus Estimates Are Too High - Eversource Energy (NYSE:

Eversource Energy (NYSE: ES) delayed its $1.6 billion Northern Pass Transmission (NPT) project in New Hampshire last month after investors hoped the project could boost share prices.

Deutsche Bank's Take

While the project made sense as Eversource Energy expands, Deutsche Bank's Caroline Bone believed consensus was too high for the project and lowered the company's price target from $59.00 to $58.00, maintaining a Hold rating on the company.

"Reflecting a reduced 2018, we are lowering our price target," Bone wrote, adding that share repurchases were unlikely to "fully offset" the NPT delay.

Share Buybacks

Now that Eversource Energy postponed the NPT and is likely to do so in 2018, "we believed it is very likely that ES could announce a share repurchase program early next year," stated the analyst. While Bone admitted the buyback program would offset 2017 delays, it looked "more challenging" to offset 2018 performance.

Looking ahead of 2017, the Deutsche Bank analyst believed repurchasing efforts in '18 and '19 "seem unlikely given expectations for a ramp up in investment related to both NPT and Access NorthEast."

Eversource Energy was expected to file a rate case for NSTAR Electric & Gas Corporation, an initiative Bone believed would become a headwind for Eversource in the future. "We continue to see this as a headwind for ES as we believe NSTAR has been overearning from a rate base perspective," said the analyst. Bone estimated a 240 basis drop in NSTAR's "electric distributions earned ROE starting in 2018 once new rates take effect."

Eversource closed Friday's regular trading session up 1.47 percent at $57.22.

ESEversource Energy

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