Exelon Corporation’s Mixed Performance Amid Focus on Growth and Sustainability
With a market capitalization of $40.8 billion, Exelon Corporation (EXC) stands as one of the largest electric utility companies in the United States. Headquartered in Chicago, Illinois, Exelon operates six regulated subsidiaries focused on the transmission and distribution of electricity and natural gas. The company is dedicated to enhancing grid infrastructure, promoting clean energy solutions, and helping its customers lower emissions through energy efficiency and renewable energy resources.
Stock Performance: A Tough Year Compared to the Market
Over the past 52 weeks, Exelon’s shares have not kept pace with the broader market. The company’s stock, EXC, yielded an 18.4% return, while the S&P 500 Index ($SPX) gained 21.5%. However, on a year-to-date basis, EXC has risen by 8%, outperforming the S&P’s 2.5% increase.
Utilities Sector Comparison
When comparing its performance to the Utilities Select Sector SPDR Fund (XLU), Exelon has also fallen short. The XLU has returned 26.6% over the past year, highlighting Exelon’s challenges in this competitive sector.
Third-Quarter Earnings Show Positive Signs
On October 30, Exelon’s stock showed modest recovery after the company reported better-than-expected Q3 earnings of $0.71 per share. Revenue reached $6.2 billion, exceeding forecasts with a 2.9% increase compared to last year. Investors were encouraged by a strong operating income growth of 6.5% and solid cash flow of $4.1 billion for the first nine months of 2024. The management also reaffirmed its annual earnings per share (EPS) growth target of 5% – 7% through 2027, in addition to a substantial $34.5 billion investment in infrastructure.
Looking Ahead: EPS Growth Projections
As analysts prepare for fiscal 2024, which concludes in December, they estimate a 3.4% growth in Exelon’s EPS to $2.46 year-over-year. Notably, the company has had a mixed performance regarding earnings surprises, exceeding consensus estimates in three of the last four quarters.
Analyst Ratings and Future Outlook
The consensus rating among 18 analysts covering EXC is a “Moderate Buy,” consisting of seven “Strong Buy” ratings, 10 “Hold” ratings, and one “Strong Sell.”
In an update on February 4, BMO Capital Markets raised its price target on Exelon to $46, maintaining an “Outperform” rating. This increase reflects an optimistic view on capital investments, especially in transmission, and extended EPS growth guidance through 2028.
Current Trading Position and Potential Upside
As of now, EXC is trading below the mean price target of $43.20. The highest price target on the street stands at $47, suggesting a potential upside of 15.7% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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