Exelon (EXC) Stock Gaining on Exclusive Electricity Supply Deal

NEW YORK (TheStreet) -- Exelon (EXC) shares are up 0.34% to $32.14 in afternoon trading on Friday after the a subsidiary of the company was selected to provide fixed-price electricity to the city of Cleveland, OH.

The company's Constellation subsidiary was selected by Cleveland following a competitive bidding process.

The company will now provide price fixed electricity and customer support to over 60,000 residents in the area.

"This agreement will deliver price protection to Cleveland customers, as they now can lock in a competitive rate for electricity supply for a two-year term. As a national energy leader with deep roots in serving Ohio residential as well as commercial, industrial and governmental customers, we look forward to serving Cleveland residents and supporting the City's sustainability goals," said senior VP Bruce Stewart.

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

"We rate EXELON CORP (EXC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. 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 3.6%. 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 18.22%.
  • 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).
  • The debt-to-equity ratio is somewhat low, currently at 0.98, 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 0.94 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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