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On Tuesday, Evercore ISI adjusted its stance on Exelon shares (NASDAQ:EXC), downgrading the rating to In Line from the previous Outperform status, while increasing the price target to $48 from $46. The firm’s analysts pointed out that Exelon’s stock has narrowed its valuation gap since the upgrade note issued in late January 2025. As a result, the stock has moved from trading at a 12% discount to a modest 4% discount based on the 2027 earnings per share (EPS) estimate. The stock, currently trading at $46.86 with a market capitalization of $47.2 billion, has shown remarkable strength with a 25.65% gain year-to-date. According to InvestingPro analysis, Exelon appears to be trading above its Fair Value, with a P/E ratio of 19.16x.
According to Evercore ISI, the near-term upside potential for Exelon is limited when compared to other utility stocks. Analysts at the firm believe that Exelon should be valued on par with its peers, as it is an electric transmission and distribution (T&D) utility with an average growth profile. They noted that Exelon does not have the generation investment upside that would justify a premium multiple, which is often seen in vertically integrated companies with data center load growth.
The new price target of $48 reflects a peer target multiple of 16.0 times the firm’s 2027 EPS estimate of $3.00 per share. Evercore ISI’s report includes various valuation scenarios and a preview of the first quarter, detailed on pages 2 and 3 of their analysis.
The update from Evercore ISI comes after Exelon’s stock performance aligned closely with their projections, showing a re-rating in the market. The firm’s decision to raise the target price while downgrading the stock rating suggests a recalibration of expectations based on the company’s current market position and potential for growth relative to its industry peers.
In other recent news, Exelon Corporation reported impressive fourth-quarter results, with adjusted earnings per share of $0.64, surpassing analyst expectations of $0.60. The company’s revenue also exceeded forecasts, reaching $5.47 billion compared to the anticipated $4.67 billion. For the full year 2024, Exelon achieved an adjusted EPS of $2.50, up from $2.38 in 2023, with total revenue increasing by 4.8% year-over-year to $23.03 billion. Looking forward, Exelon provided a 2025 adjusted EPS guidance of $2.64-$2.74, surpassing the $2.63 analyst forecast at the midpoint.
Additionally, Exelon recently issued $1 billion in new debt notes, with proceeds aimed at repaying outstanding commercial paper borrowings and supporting general corporate purposes. The company also closed a $1 billion notes offering at a 6.5% interest rate, with the net proceeds amounting to approximately $990 million. In corporate governance developments, Exelon appointed cybersecurity expert David DeWalt to its Board of Directors, enhancing its focus on technology and security. These developments reflect Exelon’s proactive financial management and strategic initiatives in the evolving energy sector.
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