On Friday, Goldman Sachs (NYSE:GS) reiterated its sell rating on shares of Exelon Corporation (NASDAQ:EXC), with a price target of $38.00. The firm's stance remains unchanged post Exelon's first-quarter earnings of 2024, citing ongoing uncertainties in the Illinois regulatory landscape and the rate case process for ComEd, Exelon's largest subsidiary.
The analyst from Goldman Sachs acknowledged the slight positive impact of the recent favorable decision in the ComEd rehearing for the year 2024. However, the softer earnings at the beginning of the year, influenced by mild weather and increased storm activity, were seen as offering more of a downside buffer rather than significant upside potential for the company's 2024 financials.
The investment firm also noted Exelon's expected earnings per share (EPS) growth, which is projected at around 5% through 2027. This figure falls below the average growth rate of 7% forecasted for the firm's coverage area. Even with the company's own guidance of 5%-7%, Goldman Sachs remains cautious.
The reiterated price target of $38 suggests an anticipated total return of approximately 4%. This assessment reflects the firm's conservative outlook on Exelon's stock performance in the near term, in light of the factors affecting its largest operating segment.
InvestingPro Insights
For investors considering the outlook on Exelon Corporation (NASDAQ:EXC), real-time data from InvestingPro provides a broader perspective. As of the latest update, Exelon has a market capitalization of approximately $37.88 billion and is trading at a P/E ratio of 16.32, which aligns closely with the adjusted P/E ratio for the last twelve months as of Q1 2024, at 16.25. This suggests that the company is priced in line with its recent earnings performance.
InvestingPro Tips highlight that Exelon operates with a significant debt burden and its short-term obligations exceed its liquid assets, which could be a concern for liquidity and financial flexibility. Additionally, the company has maintained dividend payments for 54 consecutive years, which may appeal to income-focused investors. The dividend yield as of the date provided stands at a robust 4.01%, reflecting a commitment to returning value to shareholders.
While four analysts have revised their earnings downwards for the upcoming period, it's worth noting that Exelon has been profitable over the last twelve months. This profitability, combined with a consistent dividend payout, could position Exelon as a potentially stable investment for those looking for steady income. For more in-depth analysis and additional InvestingPro Tips, visit https://www.investing.com/pro/EXC and consider using coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 7 additional InvestingPro Tips available to help inform your investment decisions.
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