Understanding Exelon’s Newly Added Risk Factor


This article was originally published on TipRanks.com

Exelon (EXC) is an American energy company based in Illinois. It plans to split its operations into two, where its Utility and Generation businesses will become independent companies. Exelon’s generation unit recently purchased Electricite de France’s 49.99% equity stake in Constellation Energy Nuclear Group for $885 million.

The Federal Energy Regulatory Commission and the New York State Public Service Commission have approved the Exelon split and the company expects to complete the separation in Q1 2022.

Exelon’s earnings report shows adjusted EPS rose to $1.09 from $1.04 in the same quarter last year and met the consensus estimate. For full-year 2021, the company anticipates adjusted EPS in the band of $2.70 to $2.90. The company recently distributed a quarterly dividend of $0.38 per share. Exelon stock currently offers a dividend yield of 2.66%.

With this in mind, we used TipRanks to take a look at the newly added risk factor for Exelon.

Risk Factors 

According to the new TipRanks Risk Factors tool, Exelon’s main risk category is Production, representing 30% of the total 43 risks identified for the stock. Legal and Regulatory and Macro and Political are the next two major risk categories at 23% and 21% of the total risks, respectively. Exelon recently updated its profile with one new Macro and Political risk factor.

The company informs investors that weather conditions affect energy demand and the price of energy commodities. Additionally, weather affects operating conditions. Exelon cautions that extreme weather conditions could cause adverse effects on its business. The company mentions that if summer is warmer or winter is colder than expected, meeting its contractual obligations could require greater resources. Furthermore, Exelon tells investors that storms can affect electricity generation and transmission as well as the transportation of natural gas.

The Production risk category’s sector average is 25%, compared to Exelon’s 30%. Exelon’s stock gained 37% in the past year.

Analysts’ Take

Morgan Stanley analyst Stephen Byrd recently reiterated a Buy rating on Exelon stock with a price target of $69, which suggests 19.46% upside potential.

Consensus among analysts is a Strong Buy based on 5 Buys and 2 Holds. The average Exelon price target of $59.86 implies 3.64% upside potential to current levels.

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