EXC
Exelon Corp
Energy, Utilities
01/17/2020
Presented
| Date | 01/14/2020 |
| Price | $45.81 |
| Market Cap | $44.53B |
| Ent Value | $85.35B |
| P/E Ratio | 19.25x |
| Book Value | $32.95 |
| Div Yield | 3.17% |
| Shares O/S | 972.11M |
| Ave Daily Vol | 6,932,781 |
| Short Int | 1.42% |
Current
| Price | $40.56 |
| Market Cap | $40.58B |
| Exelon Corp. operates as a utility services holding company, which engages in the energy generation, power marketing, and energy delivery business. The company operates through the following segments: Mid Atlantic, Midwest, New England, New York, Electric Reliability Council of Texas (ERCOT) and other Power Regions. The Mid-Atlantic segment represents operations in the eastern half of PJM, which includes New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia and parts of Pennsylvania and North Carolina. The Midwest segment represents operations in the western half of PJM, which includes portions of Illinois, Pennsylvania, Indiana, Ohio, Michigan, Kentucky and Tennessee, and the United States footprint of MISO, excluding MISO's Southern Region, which covers all or most of North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, the remaining parts of Illinois, Indiana, Michigan and Ohio not covered by PJM, and parts of Montana, Missouri and Kentucky. The New England (NE) segment represents the operations within (International Standards Organization) ISO-NE covering the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. The New York (NY) segment represents operations within ISO-NY, which covers the state of New York in its entirety. The ERCOT segment represents operations within Electric Reliability Council of Texas, covering most of the state of Texas. Exelon was founded in February 1999 and is headquartered in Chicago, IL. |
Publicly traded companies mentioned herein: Exelon Corp (EXC), PG&E Corp (PCG)
Highlights
The presenter is long shares of Exelon Corp (EXC), one of the largest utility companies in the United States. EXC is based in Chicago and most of the business comes from its regulated assets. However, the company has been one of the worst performing utilities in the Dow Jones Utility Index (DJU) over the last eight months, underperforming the DJU by ~25% due to an ongoing controversy, which revealed multiple executives’ participation in campaign violations and a bribery scheme. This controversy, along with political disputes regarding renewable energy development, has been centered around EXC’s unregulated business and investors can own this part of the business almost for free despite the presenter’s confidence that the company will exit relatively unharmed. In the presenter’s base case, the risks around the unregulated business will be mitigated at some point in 2020 and shares will appreciate 25% – 30% from the current ~$45 price ($56 – $59 price target).
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