Market Overview

Citi Downgrades Exelon To Sell

Related EXC
Another Day, Another Bank Misses On Earnings: Market Could Be On Defensive
Jim Cramer Weighs In On Exelon, Okta, Wrkco And More
Related POM
The Market In 5 Minutes: Thursday, March 24, 2016
The Exelon-Pepco Merger Approval Was 'Quite Unexpected'

Citi’s Praful Mehta downgraded the rating for Exelon Corporation (NYSE: EXC) to Sell, while reducing the price target from $28 to $27.

Analyst Praful Mehta mentioned that although Exelon’s deal with Pepco Holdings, Inc. (NYSE: POM) is earnings accretive, it is value destructive. The deal not only enhances Exelon’s equity value by $5 billion, but also brings with it additional parent net debt of $4 billion and 58 million shares.

The net impact of the deal is a reduction in Exelon’s standalone equity value by $1 per share, Mehta pointed out. Although Exelon’s dividend yield is high versus peers, the underlying weakness at the company threatens its total returns.

Mehta believes a termination of the deal would result in a higher valuation for Exelon, besides ensuring that the company’s balance sheet is not stretched. Exelon’s earnings in 2017, 2018 and 2019 are expected to increase by $0.05, $0.08 and $0.11, respectively.

Latest Ratings for EXC

Jan 2019Goldman SachsDowngradesNeutralSell
Nov 2018BarclaysMaintainsEqual-WeightEqual-Weight
Nov 2018Credit SuisseMaintainsOutperformOutperform

View More Analyst Ratings for EXC
View the Latest Analyst Ratings

Posted-In: Citi Praful MehtaAnalyst Color Short Ideas Downgrades Price Target Analyst Ratings Trading Ideas


Related Articles (EXC + POM)

View Comments and Join the Discussion!

Latest Ratings

CNPRBC CapitalUpgrades34.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Fitbit Shares Plunge On Weak Outlook; Bob Peck Stills See Long-Term Opportunity

JP Morgan Initiates SolarEdge With Overweight Rating, $34 Target