EXC - Embedded Expectations Analysis - 2021 05 10
Exelon Corporation (EXC:USA) currently trades at a slight premium to UAFRS-based (Uniform) assets, with a 1.1x Uniform P/B. At these levels, the market is pricing in expectations for profitability to remain muted, and management may have concerns about their capital allocation strategy, Constellation New Energy customers, and Texas fleet issuesSpecifically, management may lack confidence in their ability to meet their new equity capital raise target, reduce costs, and fix the instrument and pressure issues across their Texas fleet. Moreover, they may have concerns about the impact of state legislation and their business separation on capital allocation strategies. Furthermore, management may be exaggerating the capabilities of their power generation business, the resilience of Constellation New Energy's C&I customers, and the importance of their Illinois and Maryland clean energy operations. Finally, they may be concerned about the progress of their legislative negotiations and the potential of the Constellation Technology Ventures investment portfolio
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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