logo
  Join        Login             Stock Quote

Exelon (EXC) Upgraded To 'Buy' By Deutsche Bank With Dividend Cut Priced In

 November 26, 2012 01:25 PM
 


(By Balachander) Exelon Corp. (NYSE: EXC) shares were upgraded to "Buy" from "Hold" by Deutsche Bank analyst Jonathan Arnold, who says dividend cut fears present LT value opportunity.

"We have been in the negative or cautious camp on EXC all year, most notably given our EPS outlook after the June Analyst Day and views on valuation," the analyst said.

"With the stock down 34% YTD and 20% this month after CEO Crane cast doubts on dividend sustainability, however, we now see an opportunity for the value investor," Arnold wrote in a note.

The analyst said EXC has lagged utilities by 11% and the S&P by 20% in November, yet the outlook has actually improved slightly as gas/power prices have strengthened.

[Related -Bond Yields Rise On Stronger Economic Data]

"While our call may be early given dividend tax hike fears and EXC's own unresolved dividend overhang, we now see more risk in being too late," Arnold said. "Risks are weak power prices and increased retail competition."

As the stock has fallen and the yield premium has been removed, we think EXC's call option on power (and gas) recovery is now in the money, the analyst said.

Arnold maintained its 2013-14E EPS of $2.45 and $2.30, and raising 2015 to $2.50 on lower financing costs given the dividend cut he assumes in 2Q13.

The analyst raised his price target on the stock by $1 to $34.

The stock, which has been trading in the 52-week range of $28.40 to $44.45, gained 3.33% to trade at $29.52 on Monday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageMonitoring The Trend In Treasury Yields With Moving Averages

The recent stumble in US economic data raises new questions about the timing of the Fed’s plans for raising read on...

article imageIn Denial: We Pursue Endless Growth At Our Peril

One of the chief impediments to recognizing the dysfunction of the old story and adopting a new one is the read on...

article imageJobless Claims Rose Last Week, But Trend Is Still Positive

New claims for unemployment benefits in the US increased last week, but the trend remains read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.