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Eversource Energy (NYSE:ES) ticks lower in Tuesday’s trading as Evercore ISI downgraded the company to In-Line from Outperform with a $65 price target, trimmed from $84, saying it is looking for better clarity and execution on the planned offshore sale.
When upgrading Eversource (ES) earlier this year, Evercore analyst Durgesh Chopra said he had thought a successful mid-2023 planned exit from the offshore business would materially improve the company’s risk profile, given that 100% of its future earnings would soon come from its regulated subsidiaries.
But instead, the sale process is taking longer than expected due to the higher interest rate environment and the complexity of the partnership structure.
Chopra also noted rising rates plus the delayed proceeds planned for debt paydown – $2B book value as of Q3 – have hurt Eversource’s (ES) credit metrics, and Moody’s recently downgraded its rating from Baa1 to Baa2 with S&P also lowering its outlook to Negative.
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