EXC - Embedded Expectations Analysis - 2020 02 05
ï€ Exelon Corporation (EXC:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 27.4x Uniform P/E. Even at these levels, the market has muted expectations for the firm, and management may be concerned about government investigations, franchise agreements, and their wholesale businessï€ Specifically, management may be concerned about the potential fallout of the government's investigation of their lobbying practices, weakness in their cash flows, and the impact of a low-interest rate environment. In addition, they may lack confidence in their ability to renew their franchise agreements, meet earnings targets, and receive fair compensation for their zero-emitting generation fleet. Furthermore, they may be exaggerating their ability to shift their focus to the more stable customer-facing business, and they may be downplaying concerns about their wholesale optimization business and the results of their PJM capacity auction process. Finally, they may be concerned about the sustainability of recent electric distribution revenue increases in Maryland and the effectiveness of their capex plan
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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