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Monday - Mizuho (NYSE:MFG) Securities has adjusted its outlook on Consolidated Edison (NYSE:ED) shares, raising the price target to $95 from the previous $92, while maintaining a neutral position on the stock. Currently trading at $93.74, the stock sits within a broader analyst target range of $85 to $116. According to InvestingPro analysis, the stock appears fairly valued based on its proprietary Fair Value model. The revision follows the company’s recent rate case filing with the New York State Department of Public Service (NYS DPS).
Consolidated Edison submitted their CECONY electric and gas multi-year rate case Docket (2025E-0072) after the market closed. The filing proposes a return on equity (ROE) of 10.10% and a 48% equity layer. It also requests incremental revenues of $3.4 billion, which translates to an approximate 12% rate increase for electric customers and a 13% hike for gas customers. This rate case is expected to accelerate the CECONY rate base compound annual growth rate (CAGR) from 6.5% to around 7%, contingent on the approval of all capital included in their filing. The company’s financial stability is reflected in its 50-year track record of consecutive dividend increases and its "GOOD" overall financial health score from InvestingPro.
The analysts at Mizuho are anticipating additional details regarding how Consolidated Edison plans to finance the expanded rate base. They predict that staff testimony related to the rate case will likely be presented around the Memorial Day weekend, aligning with the timing of past rate filings.
Despite the price target increase, Mizuho’s stance on Consolidated Edison shares remains neutral. The firm notes that the stock is currently trading at a roughly 5% PE discount based on their revised estimates. They believe that the shares offer a balanced risk-reward ratio at their current trading levels. The new price target of $95 is justified by recent multiple expansions, as outlined in the analyst’s commentary. With a P/E ratio of 17.6x and a dividend yield of 3.63%, investors seeking deeper insights can access comprehensive valuation metrics and additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Consolidated Edison reported Q2 2024 earnings with an adjusted EPS of $0.59 and an operating revenue of $3.22 billion. The company announced a public offering of 7 million shares managed by J.P. Morgan Securities, a $700 million credit facility, and a major debt sale of $1.45 billion in debentures. Analyst firms including Guggenheim, BofA Securities, Citi, and Jefferies have updated their ratings on the company, with upgrades, maintained ratings, and raised price targets.
Additionally, the company’s subsidiary, Orange and Rockland Utilities, has proposed new rate plans for 2025-2027, pending approval by the New York State Public Service Commission. The proposal outlines changes to electric and gas rates, potential incentives for energy efficiency, and plans for capital investments over the three-year period. Also, Kirkland B. Andrews has been appointed as the new CFO of Consolidated Edison.
Citi confirmed a Buy rating on Consolidated Edison stock, backed by insights from a policy discussion focusing on the future of New York’s utility markets and broader implications. The discussion highlighted expectations for the year 2025, including energy security and reliability taking precedence over sustainability concerns, and states bolstering policies that facilitate the energy transition. These are recent developments within Consolidated Edison.
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