Deutsche Bank Reiterates Buy Rating, $34 PT on Exelon Corporation on Solid 2013 Guidance

In a report published Friday, Deutsche Bank reiterated its Buy rating and $34.00 price target on Exelon Corporation EXC. Deutsche Bank noted, “EXC still expect $3-6/MWh of upside to power forwards by 2015-16 from coal retirements, but are less certain on timing. While time will tell if the thesis plays out, the business plan and dividend are now positioned to weather the status quo. We think investors should find comfort in the sustainability of the dividend under EXC's stress cash scenarios, while those looking for an even more conservative approach likely aren't invested in the power-levered EXC story to begin with. Looking forward, EXC intends to utilize its increased financial flexibility to refocus on regulated and/or contracted growth opportunities, or at a minimum pursue value-additive debt reduction. Initial 2013 EPS guidance of $2.35 - $2.65 and the cash flow outlook were slightly stronger than our forecasts. Segment outlooks were stronger than expected for ExGen despite higher costs, and slightly weaker at the utilities (mostly ComEd). FY 2012 EPS was right in line with the midpoint of guidance, though Q4 cash flows ended up stronger than we anticipated.” Exelon Corporation closed on Thursday at $31.37.