EXC - Embedded Expectations Analysis - 2019 05 03
Exelon Corporation (EXC:USA) currently trades at historical highs relative toUAFRS-based (Uniform) Earnings, with a 27.8x Uniform P/E. Even at these levels, the market has muted expectations for the firm, and management may be concerned about the potential of technology investments, the results of ongoing regulatory cases, and the strength of their balance sheet.
Specifically, management may lack confidence in their ability to maintain cost efficiencies, realize power plant synergies, and sustain blended transmission and distribution ROE. Furthermore, they may be exaggerating the potential of their electric vehicle and artificial intelligence investments, opportunities in the energy industry, and the progress of their cybersecurity and IT system investment program. Also, they may be concerned about their ability to finance dividends, the reliability and resilience of their electric systems, and the results of ongoing state regulatory cases, particularly at PECO. Finally, they may be overstating the strength of their balance sheet, and may be concerned about their ability to meet earnings guidance and offer affordable electric bills.
Exelon is a utility services holding company engaged in the generation, delivery and marketing of energy through Exelon Generation Company, LLC and the energy distribution and transmission businesses through Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Potomac Electric Power Company, Delmarva Power & Light Company and Atlantic City Electric Company. Through its business services subsidiary Exelon Business Services Company, LLC, the company provides its subsidiaries with a variety of support services.
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