EXC - Embedded Expectations Analysis - 2020 11 09
Exelon Corporation (EXC:USA) currently trades near recent highs relative to UAFRS-based (Uniform) earnings, with a 28.6x Uniform P/E. However, even at these levels, the market has expectations for profitability to remain poor, while management is optimistic about their Utilities business' reliability, dividends, and subsidiary projectsSpecifically, management is confident in their ability to build their consumers' trust, that their Baltimore Gas and Electric subsidiary will provide investments and relief plans in Maryland, and that their Commonwealth Edison (ComEd) subsidiary improved their reliability while reducing bills. Furthermore, they are confident they invested $2.9 billion of capital into their Utilities business, that their Philadelphia Electric Company subsidiary modernized their substation project with new 13 kV feeders into West Philadelphia, and that said project had project implementation and construction participation from local companies. Additionally, they are confident they have been harvesting ExGen's cash flow for balance sheet strength and business growth, that the Illinois legislation outcome and Utilities' capital would impact their decision-making on credit, and in their ability to grow dividends at 5% through 2020
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.