Rating Change #5
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 29.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,735.00 million or 42.21% when compared to the same quarter last year. In addition, EXELON CORP has also vastly surpassed the industry average cash flow growth rate of -19.17%.
- The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
- The share price of EXELON CORP has not done very well: it is down 13.72% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- EXELON CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, EXELON CORP reported lower earnings of $3.75 versus $3.86 in the prior year. For the next year, the market is expecting a contraction of 25.6% in earnings ($2.79 versus $3.75).
Exelon Corporation, a utility services holding company, engages in the generation of electricity in the United States. It generates electricity from nuclear, fossil, hydro, and renewable energy sources. The company has a P/E ratio of 12.9, equal to the average utilities industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Exelon has a market cap of $33.35 billion and is part of the
industry. Shares are down 9.8% year to date as of the close of trading on Thursday.
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