Consolidated Edison Struggles Amid Market Rally: A Closer Look
Consolidated Edison, Inc. (ED), based in New York, operates in the regulated electric, gas, and steam delivery sectors. With a market cap valued at $33.4 billion, the firm dedicates itself to delivering safe and reliable energy services to millions of customers across its regions.
Stock Performance Below Expectations
Over the past year, ED’s shares have notably lagged behind the broader market. The utility’s stock has increased by only 6.5%, while the S&P 500 Index ($SPX) has surged nearly 30.4%. This trend continues into 2024, with ED experiencing a 6% rise, overshadowed by the SPX’s 23.1% growth year-to-date.
Comparative Analysis with Sector Performances
When examining ED’s performance against the Utilities Select Sector SPDR Fund (XLU), the disparity is even more pronounced. The ETF has gained approximately 28.3% over the past year and has achieved 25.1% growth year-to-date, far surpassing ED’s modest single-digit returns.
Q3 Results and Analysts’ Perspectives
On November 7, ED shares dipped more than 1% following the release of its Q3 earnings. The company’s adjusted earnings per share (EPS) reached $1.68, exceeding Wall Street’s estimate of $1.56. Additionally, the revenue of $4.1 billion surpassed projections of $4 billion. Consolidated Edison anticipates its full-year adjusted EPS will range from $5.30 to $5.40.
Looking ahead, analysts predict a 5.1% growth in EPS, bringing the projected total to $5.33 for the current fiscal year ending in December. Notably, ED has consistently outperformed analysts’ expectations, beating the consensus estimate in each of the last four quarters.
Analyst Ratings and Price Targets
Among 18 analysts assessing ED stock, the overall consensus suggests a “Hold” rating. This includes four “Strong Buy” ratings, nine “Holds,” and five “Strong Sells.” Compared to a month prior, this outlook is more optimistic, with three analysts now recommending a “Strong Buy.”
On November 11, RBC Capital analyst Shelby Tucker reiterated a “Hold” rating for ED, setting a price target of $101, which suggests a potential upside of 4.7% from its current valuation. The average price target stands at $103, indicating a 6.8% premium, while the highest estimate at $116 projects an upside potential of 20.3%.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data within this article serve purely for informational purposes. For more details, please view the Barchart Disclosure Policy here.
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