Bank of America analysts report a more constructive view on a subset of U.S. power and utilities companies after recent meetings with management teams. The discussions, the analysts said, brought into focus the role of rising data-center loads, large infrastructure investment plans, customer affordability concerns and evolving regulatory environments in shaping near-term and multi-year earnings trajectories.
Analysts emphasized managements' demonstrated capacity to deliver on sizable capital execution agendas while operating under regulatory oversight. Between now and the release of first-quarter earnings, Bank of America said it will be monitoring regulatory decisions and business developments that could affect the sector's growth outlook. The firm retained Buy ratings on a number of utilities it views as well positioned from both a growth and regulatory standpoint.
1. Eversource Energy
Bank of America kept a Buy rating on Eversource Energy following management's assessment of regional regulatory and project developments. Executives characterized the regulatory atmosphere in Connecticut as noticeably improved, pointing to four newly seated commissioners and more collaborative engagement than in prior years.
Eversource plans to submit a comprehensive Connecticut electric distribution rate case in July - the first such filing in roughly eight years - and management signaled that Massachusetts transmission investment is accelerating, with incremental Connecticut transmission spending planned as well. Management also identified a potential Connecticut advanced metering infrastructure program of up to $1 billion that is not included in the current five-year plan but could provide upside if adopted.
In the wake of the Aquarion hearing process, management anticipates net cash proceeds of about $1.6 billion, which the company intends to use primarily to reduce debt. Commentary on offshore wind projects was comparatively more favorable: construction risk at Revolution Wind was described as largely behind the company and commissioning was reported to be underway.
On the earnings front, Eversource reported fourth-quarter 2025 non-GAAP earnings of $1.12 per share, up from $1.01 per share in the comparable prior-year period. Separately, the Federal Energy Regulatory Commission established a new base return on equity for New England Transmission Owners at 9.57%, a development that has prompted adjustments to price targets across several analyst shops.
2. Evergy
Bank of America maintained a Buy stance on Evergy after management characterized a flurry of large energy service agreements signed in February as a meaningful inflection. The four agreements collectively represent roughly 1.9 gigawatts of steady-state peak demand, according to the company.
Management now expects load growth to top 7% annually through 2030, underpinning rate base growth north of 11.5%. That trajectory supports a revised long-term adjusted earnings-per-share growth outlook of 6% to 8%+, with an acceleration to 8%+ beginning in 2028. Executives also expect to add at least one more energy service agreement during 2026, which would extend the company's load-driven growth into the next decade.
To preserve reliability, the company extended retirement dates for 5 gigawatts of coal-fired capacity into the latter half of the 2030s. Management described regulatory relationships in Kansas and Missouri as constructive and said there were no major political flashpoints emerging around utilities and affordability.
Evergy reported fourth-quarter 2025 earnings of $0.42 per share and disclosed an issuance of $350 million of notes due 2029. Separately, research firm BTIG initiated coverage on the company with a Buy rating, citing its growth outlook.
3. H2O Americas
Bank of America reiterated a Buy rating on H2O Americas and noted management raised the company's long-term adjusted earnings-per-share growth target to a 6% to 8% range, anchored to 2025 adjusted EPS of $2.99. Company forecasts call for growth to track at or above the top end of that range over the 2026 to 2030 period.
The five-year capital expenditure plan was increased by 31% to $2.7 billion, a program that implies an approximate 13% compound annual growth rate in rate base through 2030. Management said the increase is driven principally by pipeline replacement, PFAS compliance work and incremental investments in Texas.
Regulatory shifts were framed as structurally reducing earnings risk, with particular emphasis on PFAS cost recovery. Connecticut's enactment of the Water Quality Treatment Adjustment was cited as a mechanism allowing annual recovery of PFAS and other emerging contaminant capital, which management expects to be beneficial for rate-setting outcomes.
The company's acquisition of Quadvest was noted as materially reshaping its Texas footprint by adding $483.6 million of ratemaking rate base. Executives cautioned, however, that the deal is expected to cause near-term dilution to earnings per share until rates are reset in the acquired service area.
4. PPL Corp
Bank of America retained its Buy rating on PPL Corp, reflecting recent rate-case progress and a multi-year capital plan that underpins the company's regulated earnings profile. Management provided updates on a settled Pennsylvania rate case, a rate case settlement approval in Kentucky and a newly filed case in Rhode Island.
The Pennsylvania rate case settlement represents a constructive result, delivering approximately 77% of the company's original revenue request. Management described the company's outlook as anchored by steady regulated earnings growth supported by an expanded infrastructure investment program.
Guidance from the company calls for ongoing earnings per share of $1.90 to $1.98 in 2026, which management said represents about 7% growth year over year. PPL has extended its long-term annual adjusted EPS growth target of 6% to 8% through at least 2029.
The growth profile is supported by a $23 billion capital investment plan covering 2026 through 2029, which the company estimates will translate into roughly 10% annual rate base growth over that period. PPL Electric Utilities' settlement in principle in its Pennsylvania distribution rate case was a key regulatory milestone; that news led several analyst firms, including BTIG and BMO Capital, to raise price targets on the company's shares.
Bank of America's recent meetings with management teams across these utilities highlighted a convergence of long-duration capital programs, load growth tied to data-center demand and incremental regulatory progress in several jurisdictions. The analysts said they will continue to track rate case filings, capital program execution and load contract developments ahead of first-quarter reporting, given their potential to influence earnings trajectories and investor expectations.