Consolidated Edison (ED) is among the few largest regulated utilities in the country. So far in 2018, the stock has fallen almost 10%. Tax reforms, valuation concerns, and rising interest rates pulled utility stocks down in the last six months. The following chart shows the comparative stock price movement of Consolidated Edison along with broader utilities (XLU) (VPU).
Consolidated Edison stock seems to be trading at a discounted valuation given its PE (price-to-earnings) ratio. Consolidated Edison is trading at a PE ratio of 15x, while its five-year historical average is ~16x. Given Consolidated Edison’s EV-to-EBITDA valuation, the stock was trading at an EV-to-EBITDA valuation of 10x. The company’s five-year historical average is near 10x. Consolidated Edison stock seems to be trading at a fair valuation compared to its historical average.
Consolidated Edison has a mean target price of $77.88—compared to its current market price of $75.43, which implies a potential upside of more than 3% going forward.
Among the 15 analysts tracking Consolidated Edison, six analysts recommend the stock as a “sell,” one recommends it as a “strong sell,” six recommend it as a “hold,” and one recommends it as a “strong buy.”