EXC - Embedded Expectations Analysis - 2020 06 09
Exelon Corporation (EXC:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 28.3x Uniform P/E. At these levels, the market has expectations for profitability to remain near lows, and management may be concerned about policy changes, investments, and their debt obligationsSpecifically, management may have concerns about the ZEC programs in Illinois and New York, potential policy changes for their plants, and the impact of their increased investment since Q4 2018. In addition, they may lack confidence in their ability to maintain a strong balance and investment-grade credit rating and meet their financial commitments on the retirement of debt. Moreover, they may be concerned about generation restriction in their utilities, the timing of the Minimum Offer Price Rule (MOPR) decision, and the impact of a drop in their discount rate for pension expenses. Finally, they may lack confidence in their ability to increase investment despite modest bill inflation, limit price increases for customers, and achieve their forecasted EPS growth of 6%-8%
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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