Exelon stock price target raised to $46 by BMO Capital

On Tuesday, BMO Capital Markets adjusted its price target on Exelon Corporation (NASDAQ:EXC) shares, pushing it up to $46.00 from the previous $44.00. The firm kept its Outperform rating on the stock. The utility giant, currently valued at $40.77 billion, has seen its shares climb 7.78% year-to-date and is trading near its 52-week high of $41.19. According to InvestingPro analysis, the stock appears slightly overvalued at current levels. The move comes ahead of the company’s year-end earnings call scheduled for February 12th, where Exelon is expected to present new financial guidance for 2025, update its capital and financing plans, and possibly extend its 5-7% earnings per share (EPS) growth projection through 2028. InvestingPro data shows the company has maintained strong operational performance with 9.03% revenue growth in the last twelve months, though 3 analysts have recently revised their earnings expectations downward.

BMO Capital anticipates that Exelon will reveal an enhanced capital plan with a focus on additional transmission spending opportunities. This plan is projected to bolster the company’s rate base growth, which is currently around 7.5%, and extend it through 2028. According to the analyst, the lack of significant regulatory events in 2025, following the fourth quarter 2024 update, could lead to further multiple expansion as the company executes its strategy.

Exelon’s shares have been noted as one of the top performers since the beginning of the year, with a re-rating of approximately 7% after the December refiled grid decision in Illinois. Despite this positive momentum, the stock is still trading at around a 12% discount based on the estimated 2027 EPS. The company maintains a solid dividend yield of 3.75% and has impressively maintained dividend payments for 54 consecutive years, as highlighted in InvestingPro’s comprehensive analysis, which includes several additional valuable insights available to subscribers. BMO Capital sees potential for multiple expansion, especially considering the current market’s limited exposure to "vanilla" value stocks and the calm regulatory landscape projected for the year.

The analyst’s comments highlight the expectation for Exelon to introduce 2025 guidance, advance its capital and financial strategies, and continue its long-term EPS growth guidance into 2028. The focus on incremental transmission spending is seen as a key factor in strengthening the company’s growth trajectory.

Exelon Corporation, with its upcoming year-end call, is at a pivotal moment where its financial and operational plans will be closely scrutinized by investors. BMO Capital’s revised price target reflects a positive outlook on the company’s ability to execute its growth strategy and capitalize on the opportunities ahead. Trading at a P/E ratio of 16.72, investors seeking deeper insights into Exelon’s valuation and growth prospects can access the detailed Pro Research Report, available exclusively on InvestingPro.

In other recent news, Evercore ISI analyst Durgesh Chopra has upgraded the stock rating for Exelon Corporation from ’In Line’ to ’Outperform.’ This upgrade comes with an increased price target, moving from $43.00 to $44.00. The analyst highlighted Exelon’s underperformance in 2024, noting a 9% gain compared to the 17% average of the regulated coverage universe, resulting in a 12% price-to-earnings (P/E) discount to Evercore’s 2027 earnings per share (EPS) estimate for Exelon.

Chopra has indicated that the current discount level is considered excessive despite Exelon’s average growth rate of 6% and its status as a pure transmission and distribution utility. The analyst further emphasized that the multi-year Illinois rate decision made in December 2024 offers investment certainty through 2027, supported by an anticipated light regulatory calendar for 2025.

Evercore ISI sees an attractive risk/reward scenario for Exelon, predicting a base case total return of 16%. The firm also provided a bull/bear case valuation, suggesting a potential 21% upside and a 5% downside, with respective target prices of $46 and $36.

Investors should note the upcoming fourth-quarter earnings release as a catalyst for the stock. Scheduled for February 2025, Exelon is expected to provide its 2025 EPS guidance range and a detailed four-year capital and financing plan for 2025-2028. Evercore ISI’s EPS estimate for 2025 aligns with the consensus at $2.62 and $2.63, respectively.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.