Why Exelon (EXC) Stock Is Declining Today

NEW YORK (TheStreet) -- Exelon (EXC) shares are down -2.8% to $34.69 on Wednesday following storms in the Midwest on Monday that have left 400,000 of its ComEd subsidiary's customers without power.

Lightning and 75 mph winds affected states in the Midwest that left over 150,000 residents without power as of Tuesday night despite concerted efforts by the company to rectify the outages.

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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 few notable 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 increase in stock price during the past year. 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 10.4%. 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.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • 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.
  • You can view the full analysis from the report here: EXC Ratings Report
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