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1. Company Snapshot

1.a. Company Description

Exelon Corporation, a utility services holding company, engages in the energy generation, delivery, and marketing businesses in the United States and Canada.It owns nuclear, fossil, wind, hydroelectric, biomass, and solar generating facilities.The company also sells electricity to wholesale and retail customers; and sells natural gas, renewable energy, and other energy-related products and services.


Additionally, it is involved in the purchase and regulated retail sale of electricity and natural gas; and transmission and distribution of electricity, and distribution of natural gas to retail customers.Further, the company offers support services, including legal, human resources, information technology, financial, supply management, accounting, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement services.It serves distribution utilities, municipalities, cooperatives, and financial institutions, as well as commercial, industrial, governmental, and residential customers.


Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.

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1.b. Last Insights on EXC

Exelon Corporation's recent performance was driven by strong Q4 2024 earnings, beating expectations with a non-GAAP EPS of $0.64, and revenue of $5.5 billion, showing a slight increase. The company's steady earnings trajectory and attractive valuation support a buy rating. Exelon's anticipated EPS growth of 5-7% and a potential 10% price increase offer a decent margin of safety. Key drivers include the company's decoupled revenues, ongoing energy efficiency programs, and rising demand from data centers, as well as a $38 billion investment in infrastructure, which is expected to drive growth.

1.c. Company Highlights

2. Exelon's Q3 Earnings: A Strong Performance

Exelon reported a strong third-quarter earnings, with EPS coming in at $0.86, beating analyst estimates of $0.778. The company's financial performance was driven by higher distribution and transmission rates, as well as favorable storm conditions. Revenue growth is expected to continue, with analysts estimating a 3.5% growth rate for next year. The company's current valuation metrics, including a P/E ratio of 17.53 and a P/B ratio of 1.68, suggest that the market is expecting a certain level of growth. The EV/EBITDA ratio of 11.01 and a ROE of 9.76% indicate that the company is generating returns in line with its cost of capital.

Publication Date: Nov -05

📋 Highlights

Operational Performance

Exelon's operational performance remains strong, with its four utility operating companies ranked 1, 2, 4, and 7 out of its peer set. The company is making progress in its states and at PJM in advancing solutions to meet the growing need for reliable and resilient power. As Calvin Butler, Exelon's CEO, noted, "We continue to deliver some of the best operational performance in the industry." The company's efforts to address the energy crisis and bring down energy costs for customers are ongoing, with several initiatives underway to enhance energy efficiency and promote distributed generation.

Regulatory Developments

Exelon is actively engaged in regulatory developments in its service territories. In Maryland, the commission initiated a request for merchant generator proposals for up to 3 gigawatts of new energy supply. Exelon is also participating in discussions around resource adequacy in Pennsylvania, with two bills in the House and Senate. In Illinois, the company is supporting the Clean and Reliable Grid Affordability Act, which aims to enhance energy efficiency, promote distributed generation, and mandate time-of-use rate offerings.

Transmission and Large Load Projects

Exelon is investing heavily in its transmission infrastructure, with a $10 billion to $15 billion transmission CapEx plan. The company is also seeing significant interest in its large load projects, with a 47 gigawatt pipeline of potential projects. As Jeanne Jones, Exelon's CFO, noted, the company uses a 2-step process to determine the likelihood of projects moving forward, including completing cluster studies and having customers sign transmission services agreements. The company's efforts to expedite the process for long-term investments needed to update the grid for larger loads are ongoing, with a focus on meeting the growing demand for data center power.

Valuation and Dividend

Exelon's current valuation metrics, including a dividend yield of 3.41%, suggest that the company is offering a relatively attractive return to investors. The company's commitment to investing in its grid and supporting economic development in its service territories is expected to drive long-term growth. With a strong operational performance and a solid financial position, Exelon is well-positioned to deliver on its commitments to customers, communities, and investors.

3. NewsRoom

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ComEd Announces Upcoming Low-Income Discount as Latest Program to Assist with Rising Energy Costs

Dec -04

Source: businesswire.com

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Edgestream Partners L.P. Sells 69,216 Shares of Exelon Corporation $EXC

Dec -03

Source: defenseworld.net

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Exelon Prices Offering of $900 Million of 3.25% Convertible Senior Notes due 2029

Dec -02

Source: businesswire.com

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Exelon Announces Proposed Offering of $900 Million of Convertible Senior Notes due 2029

Dec -01

Source: businesswire.com

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Exelon Provides Notice of Pending and Proposed Settlement of Shareholder Derivative Action

Nov -24

Source: businesswire.com

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ComEd Receives National Recognition for Clean Energy Workforce Training Program

Nov -24

Source: businesswire.com

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Data Center Politics Get Messy. Billions in Tech Investments Are on the Line.

Nov -21

Source: barrons.com

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ComEd, BBB and Illinois Gas Companies Provide Practical Tips to Help Prevent Utility Scams

Nov -19

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Commonwealth Edison Company (ComEd)

Expected Growth: 3.2%

Slightly above the global growth hypothesis due to its strategic importance and ongoing infrastructure investments, which are expected to drive growth.

Pepco Holdings LLC (PHI)

Expected Growth: 3.0%

In line with the global growth hypothesis, as PHI's utilities operate in a relatively stable regulatory environment, with growth driven by infrastructure investments and rate case outcomes.

Baltimore Gas and Electric Company (BGE)

Expected Growth: 3.1%

Slightly above the global growth hypothesis, driven by ongoing grid modernization efforts and a strong focus on customer satisfaction, which is expected to drive growth.

PECO Energy Company (PECO)

Expected Growth: 2.9%

Slightly below the global growth hypothesis, as PECO's growth is tempered by regulatory lag and the need for continued infrastructure investments.

Other

Expected Growth: 2.5%

Below the global growth hypothesis, as this segment is subject to variability and is not directly related to the core utility operations, making it more challenging to predict growth.

Intersegment Eliminations

Expected Growth: None%

None

7. Detailed Products

Electricity Generation

Exelon Corporation generates electricity through its nuclear, fossil, wind, and solar power plants.

Electricity Transmission

Exelon Corporation owns and operates high-voltage transmission lines that transport electricity from power plants to the grid.

Electricity Distribution

Exelon Corporation distributes electricity to customers through its network of power lines, substations, and transformers.

Natural Gas Distribution

Exelon Corporation distributes natural gas to customers through its network of pipelines and meters.

Renewable Energy

Exelon Corporation develops and operates renewable energy projects, including wind and solar farms.

Energy Efficiency

Exelon Corporation offers energy efficiency programs and services to help customers reduce energy consumption.

Energy Storage

Exelon Corporation develops and operates energy storage systems to optimize energy usage and reduce peak demand.

8. Exelon Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Exelon Corporation operates in a highly regulated industry, and the threat of substitutes is moderate. While there are alternative energy sources available, they are not yet widely adopted, and Exelon's diversified energy portfolio helps to mitigate this threat.

Bargaining Power Of Customers

Exelon Corporation's customers have limited bargaining power due to the lack of alternative energy providers in many areas. Additionally, Exelon's large customer base and diversified energy portfolio reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Exelon Corporation's suppliers have moderate bargaining power due to the availability of alternative suppliers and the company's dependence on fuel sources. However, Exelon's large scale and diversified energy portfolio help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the energy industry, including significant capital requirements and regulatory hurdles. Exelon Corporation's established position and diversified energy portfolio also make it difficult for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry in the energy industry is high due to the presence of several large competitors and the ongoing trend of consolidation. Exelon Corporation faces intense competition in terms of pricing, customer service, and innovation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.08%
Debt Cost 4.56%
Equity Weight 36.92%
Equity Cost 6.93%
WACC 5.44%
Leverage 170.87%

11. Quality Control: Exelon Corporation passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
WEC Energy

A-Score: 6.9/10

Value: 6.1

Growth: 4.9

Quality: 6.7

Yield: 6.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
DTE Energy

A-Score: 6.5/10

Value: 4.7

Growth: 3.7

Quality: 6.9

Yield: 6.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Exelon

A-Score: 6.4/10

Value: 5.9

Growth: 3.8

Quality: 4.4

Yield: 7.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Xcel Energy

A-Score: 6.4/10

Value: 5.0

Growth: 4.6

Quality: 3.9

Yield: 6.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Dominion Energy

A-Score: 6.3/10

Value: 5.5

Growth: 3.6

Quality: 4.6

Yield: 8.0

Momentum: 6.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
NextEra Energy

A-Score: 5.3/10

Value: 2.4

Growth: 6.0

Quality: 5.4

Yield: 6.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.81$

Current Price

43.81$

Potential

-0.00%

Expected Cash-Flows