JPMorgan has shifted its rating on $ES from Neutral to Underweight, citing increasing financial strain tied to its offshore wind ambitions. At the heart of the downgrade is the Revolution Wind project, where cost overruns and regulatory uncertainties are raising red flags. With expenses mounting and no clear regulatory clarity, the risk-to-reward profile has turned less favorable in the near term.
⚡ The utility giant is also navigating a tough landscape in the Northeast. Customers are facing high bills, and Connecticut’s regulatory environment remains murky as key appointments to the Public Utilities Regulatory Authority are still pending. These delays can limit Eversource’s ability to secure favorable outcomes or move decisively on key infrastructure initiatives.
💰 On the dividend front, $ES currently offers a forward yield of around 5.15%, translating to an annual dividend of $2.90 per share. However, with a dividend payout ratio exceeding 127%, it’s clear the company is disbursing more in dividends than it earns. This could put pressure on future payouts if financial headwinds persist.
📊 With wind investments under scrutiny and regulatory friction growing, the downgrade reflects a more cautious stance. For dividend-focused investors, the yield is attractive, but the sustainability of those payments may be in question as the company works through operational and political uncertainties.