Exelon (EXC) Stock Soaring on Pepco Merger Approval

NEW YORK (TheStreet) --Shares of Exelon Corp. (EXC) are gaining by 3% to $34.54 on heavy volume in late afternoon trading on Friday, after the company announced that the Maryland Public Service Commission approved its merger with Pepco Holdings (POM).

Exelon, an energy company, said it is pleased with Maryland's decision to okay its merger with the holding company and electricity distributor and supplier but noted that state's approval comes with modifications to a number of its proposed conditions, adding that it will need to carefully review the decision in its entirety.

"Our proposal delivers significant economic benefits to Maryland customers, increases reliability, promotes energy efficiency and advances clean energy as part of a long-term commitment to improve service and modernize our grid. We will have more to say once we have time to study the order," Exelon said in a statement announcing the deal's approval.

So far today, 7.44 million shares of Exelon have exchanged hands as compared to its average daily volume of 6.98 million shares.

Separately, 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 several positive factors, 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, compelling growth in net income, good cash flow from operations, notable return on equity and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 22.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 670.0% when compared to the same quarter one year prior, rising from $90.00 million to $693.00 million.
  • Net operating cash flow has significantly increased by 803.03% to $1,490.00 million when compared to the same quarter last year. In addition, EXELON CORP has also vastly surpassed the industry average cash flow growth rate of -25.99%.
  • 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. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, EXELON CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • EXELON CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXELON CORP reported lower earnings of $1.87 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus $1.87).
  • You can view the full analysis from the report here: EXC Ratings Report

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