Valued at a market cap of $40.8 billion, Exelon Corporation (EXC) is one of the largest electric utilities in the U.S., specializing in the transmission and distribution of electricity and natural gas through its six fully regulated subsidiaries. Based in Chicago, Illinois, the company focuses on grid modernization, clean energy solutions, and supporting customers in reducing emissions through energy efficiency and renewable energy adoption.
Shares of Exelon have lagged behind the broader market over the past 52 weeks. EXC stock has returned 18.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 21.5%. However, shares of EXC are up 8% on a YTD basis, outperforming SPX's 2.5% gain.
Looking closer, the energy company has also underperformed the Utilities Select Sector SPDR Fund's (XLU) 26.6% return over the past 52 weeks.
Shares of Exelon recovered marginally on Oct. 30 due to better-than-expected Q3 earnings of $0.71 per share. Revenue also exceeded expectations at $6.2 billion, surpassing the consensus estimate and marking a 2.9% year-over-year increase. Additionally, strong operating income growth of 6.5% and a solid cash flow of $4.1 billion in the first nine months of 2024 reassured investors. Exelon’s reaffirmation of its 5% - 7% annual EPS growth target through 2027 and its planned $34.5 billion infrastructure investment further supported positive sentiment.
For fiscal 2024, which ended in December, analysts expect EXC's EPS to grow 3.4% year-over-year to $2.46. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, 10 “Holds,” and one “Strong Sell.”
On Feb. 4, BMO Capital Markets raised its price target on Exelon to $46 while maintaining an “Outperform" rating, citing expectations for enhanced capital investments, particularly in transmission, and extended EPS growth guidance through 2028.
As of writing, EXC is trading below the mean price target of $43.20. The Street-high price target of $47 implies a potential upside of 15.7%.
