UPDATE: ISI Group Upgrades Exelon to Buy on Valuation Post Sell-Off

ISI Group raised its rating on Exelon EXC from Neutral to Buy while reiterating its previous $35 price target. ISI Group noted, " EXC shares have traded off 13% since 11/1, when the company announced that it might cut the dividend if power market conditions did not show improvement over the subsequent six months. Interestingly, the stock is now down 20% since the natural gas and power prices bottomed on 8/29/12 (gas and power prices are both up ~12% since then). While we think that a substantial dividend cut is likely required to maintain EXC's investment grade rating, our valuation model is dividend agnostic; - at current forward curves, and assuming EXC fails to fully achieve its gross margin targets in its competitive retail and wholesale power business, we still derive a 12 month target price of $35 /sh, 19% upside to the current price (14.3x 2014 EPS and an 3.1% pro-forma dividend yield)." Exelon closed at $29.32 on Monday.