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These S&P 500 Utilities Offer Big Upsides after the Rate Hike

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Part 11
These S&P 500 Utilities Offer Big Upsides after the Rate Hike PART 11 OF 13

Exelon: Price Targets and Analysts’ Views

Exelon

Exelon (EXC), valued at $33 billion, is the largest hybrid utility by market capitalization. Exelon stock has gained more than 11% so far in 2017. According to Wall Street analysts, Exelon still has a potential upside of 8% in the next year. It has a one-year price target of $38.80, compared with its current market price of $35.98.

Of the 22 analysts tracking Exelon, seven recommend a “hold,” ten recommend a “buy,” and five recommend a “strong buy.” There were no “sell” recommendations as of March 17, 2017.

Dominion Resources (D) has a price target of $77.41, compared with its current market price of $76.80. The target implies an estimated upside of just 0.8% in one year.

Exelon: Price Targets and Analysts&#8217; Views

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Exelon’s growth prospects

Following a common trend in the industry (XLU), Exelon has also been increasingly concentrating on expanding its regulated operations. Its competitive operations have long been under pressure due to weak wholesale power prices and poor power demand growth.

Despite softness in the competitive power sector, Exelon has maintained strong revenue growth in the last several years. This growth in recent quarters has been driven by its customer base expansion and strong contribution from regulated operations.

Although Exelon (EXC) expects flat-to-negative earnings in 2017, its rate base is expected to rise 6.5% annually through 2020. Strong rate-base growth generally stabilizes a utility’s long-term earnings.

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