Why Exelon (EXC) Stock Is Climbing Today

NEW YORK (TheStreet) -- Exelon (EXC) shares are up 3.95% to $35.50 on reports that the price of electricity is set to rise dramatically.

Payments to electricity producers are set to rise to $120 a megawatt per day, more that twice the current rate of $59.37, by June 2017 according to PJM Interconnection, which runs the largest power grid in the country.

American Electric Power Co.  (AEP), UBS AG  (UBS) and Standard & Poor's had previously estimated a price increase ranging from $75- $100.

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TheStreet Ratings team rates EXELON CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXELON CORP (EXC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EXC's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 19.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EXELON CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EXELON CORP increased its bottom line by earning $2.00 versus $1.40 in the prior year. This year, the market expects an improvement in earnings ($2.37 versus $2.00).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 2350.0% when compared to the same quarter one year prior, rising from -$4.00 million to $90.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.90, 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 0.74 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Electric Utilities industry and the overall market, EXELON CORP's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: EXC Ratings Report
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