EXC
EXCExelon Corporation is a major utility company that generates and distributes electricity.
It operates the nation's largest number of nuclear power plants, focusing on reliable, largely carbon-free energy production.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy EXC Today?
Technical Analysis
EXC shows mixed technical signals. While it has demonstrated short-term stability with a slight monthly gain, it remains in a clear downtrend over three months, significantly underperforming the market. Trading in the lower-middle of its 52-week range with low volatility (beta of 0.56) suggests it is a defensive holding but lacks strong upward momentum currently.
Fundamentals
Fundamentally, EXC exhibits strong operational improvement with substantial revenue growth and expanding profit margins in recent quarters. However, its financial health shows some concerns with moderate leverage, thin interest coverage, and low current ratios. The company's returns (ROE/ROA) are modest but typical for the capital-intensive utility sector, supported by efficient working capital management.
Valuation & Peer Comparison
EXC trades at reasonable absolute valuation multiples (PE around 15) with a very low PEG ratio, indicating expectations for solid earnings growth. The elevated EV/EBITDA ratio is a concern, but without direct peer data, it's unclear if this represents a sector norm or a specific premium. Overall, valuation appears fair but not exceptionally cheap.
Risk Assessment
The stock carries lower volatility risk than the market, behaving defensively with a modest maximum drawdown. Primary risks are regulatory rather than market-related, given its utility status and absence of significant short interest. Liquidity is adequate for a large-cap company.
Investment Recommendation
Consider for Defensive Income Portfolios
EXC presents a compelling case for risk-averse investors seeking stable utility exposure. The company's improving profitability, reasonable valuation, and defensive characteristics outweigh its technical weakness and moderate financial leverage. While not a high-growth opportunity, it offers relative safety and steady performance suitable for investors prioritizing capital preservation with modest returns.
EXC 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on the provided analysis, the 12-month outlook for EXC appears stable with modest upside potential, contingent on execution and regulatory developments.
Key Catalysts: The primary catalyst is the continuation of its strong operational improvement, translating revenue growth into earnings. As a defensive utility, it could also benefit from any market rotation towards safer, income-generating assets during economic uncertainty.
Potential Risks: The main risks are regulatory, as policy changes could impact operations or rate structures. The company's moderate financial leverage and thin interest coverage also pose a risk if interest rates remain elevated.
Target Price: While no specific analyst target is provided, the fair valuation and earnings growth prospects suggest a potential target range in the mid-to-high $40s, representing modest appreciation from the current price of $43.32.
Wall Street Consensus
Most Wall Street analysts are optimistic about EXC's 12-month outlook, with consensus target around $43.60, indicating expected upside potential.
Bulls vs Bears: EXC Investment Factors
Overall, EXC has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Stock Hits 52-Week High: EXC stock reaching new highs indicates strong market confidence and momentum.
- Institutional Investor Interest: FIRST CITIZENS BANK & TRUST CO opened new $10.9M position, showing institutional confidence.
- Stable Regulated Returns: Exelon offers defensive play with solid yield in expensive market environment.
- New Technology Leadership: Tim Peterson joining as CIO brings expertise to serve 10.7M utility customers.
- Successful Debt Offering: $900M convertible notes pricing shows strong market access and financial flexibility.
Bearish
- Institutional Selling Pressure: Commonwealth Equity reduced position by 10.4%, indicating some profit-taking.
- Market Concentration Risk: Heavy reliance on regulated utility operations limits growth potential.
- Earnings Quality Concerns: Questions raised about whether current earnings justify investor attention.
- Competitive Pressure: Traditional utility model faces challenges from disruptive energy technologies.
- Debt Load Increase: Additional $900M in convertible notes adds to company's leverage position.
EXC Technical Analysis
EXC has exhibited relatively stable but moderately negative performance over the past year, characterized by significant underperformance against the broader market.
The stock has demonstrated notable short-term resilience with a slight 0.53% gain over the past month; however, this fails to offset the substantial 7.16% decline over three months, reflecting a concerning 10.53% underperformance relative to the market benchmark. This three-month weakness suggests persistent negative momentum despite recent stabilization.
Currently trading at $43.32, EXC sits in the lower middle portion of its 52-week range ($37.32-$48.505), positioned approximately 32% above its low and 11% below its high. While not deeply oversold, the current price level reflects a pullback from recent highs rather than extreme conditions, supported by the stock's below-average beta of 0.556 indicating lower volatility than the market.
| Period | EXC Return | S&P 500 |
|---|---|---|
| 1m | +0.1% | +1.3% |
| 3m | -7.4% | +5.7% |
| 6m | +1.1% | +10.6% |
| 1y | +14.7% | +16.5% |
| ytd | -0.7% | +1.1% |
EXC Fundamental Analysis
Revenue & Profitability EXC demonstrated strong quarterly revenue growth with Q3 revenue reaching $6.71 billion, up from $5.43 billion in Q2, representing a 23.5% sequential increase. Profitability improved significantly as net income rose to $875 million (13.0% margin) from $391 million (7.2% margin) in the prior quarter, driven by expanding operating margins. The company's operating income ratio expanded from 17.1% to 22.4%, indicating improved operational leverage.
Financial Health The company maintains moderate leverage with a debt ratio of 43.6% and total debt to capitalization of 63.8%, though the interest coverage ratio of 2.8 warrants monitoring. Current ratios below 1.0 suggest potential liquidity constraints, but positive operating cash flow generation provides some buffer. Free cash flow remains modest relative to operating cash flow, with a conversion ratio of just 7.1%.
Operational Efficiency EXC shows modest returns with ROE at 3.1% and ROA at 0.77%, reflecting the capital-intensive nature of the utility sector. Asset turnover remains low at 0.06, consistent with industry characteristics requiring substantial infrastructure investments. The negative cash conversion cycle of -22.7 days indicates efficient working capital management, as the company collects from customers before paying suppliers.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Level: EXC's valuation metrics present a mixed picture. The company trades at reasonable absolute multiples with a TTM PE of 15.3 and forward PE of 13.0, supported by a PEG ratio below 0.11 indicating strong earnings growth expectations relative to its valuation. However, the elevated EV/EBITDA ratio of 37.5 suggests the enterprise value carries significant premium relative to operating earnings, while the PB ratio of 1.5 and PS ratio of 1.8 appear moderate for a regulated utility business.
Peer Comparison: Without specific industry average data available, a comprehensive peer comparison cannot be conducted. The analysis would benefit from benchmarking these metrics against other major regulated utilities to determine EXC's relative valuation positioning within its sector. This limitation prevents drawing definitive conclusions about whether EXC trades at a premium or discount to industry peers based on these fundamental ratios.
Investment Risk Disclosure
Volatility Risk: With a Beta of 0.556, EXC exhibits significantly lower volatility than the broader market, implying it is less sensitive to market swings. This defensive characteristic is corroborated by its mild one-year maximum drawdown of -11.07%, indicating a relatively stable price history with limited downside risk during recent market stress.
Other Risks: The stock demonstrates no short interest, reflecting a market consensus that lacks a significant bearish sentiment. Given its status as a large-cap utility, EXC is expected to have sufficient trading liquidity, leaving regulatory changes or adverse legislative developments as the primary non-market risks that could impact its operations and profitability.
FAQs
Neutral/Hold - EXC appears fairly valued with limited near-term catalysts. While its defensive utility profile (low beta, stable returns) and recent profitability improvements provide support, technical underperformance and modest growth prospects temper upside potential. This stock suits income-focused or defensive investors seeking stable dividends in a regulated utility, but may disappoint those seeking aggressive growth.
Based on the provided data, EXC appears to be fairly valued to slightly undervalued. While its PE ratio of 15.3 is reasonable, the extremely low PEG ratio of 0.11 is a strong signal of undervaluation relative to its earnings growth expectations. This is supported by improving profitability, with net income margins expanding significantly to 13.0%. However, the valuation is tempered by a high EV/EBITDA ratio of 37.5 and modest returns (3.1% ROE), which are typical for the capital-intensive utility sector but suggest the stock is not deeply undervalued.
Based on the provided information, here are the key risks of holding EXC, ordered by importance:
1. Regulatory and Legislative Risk: As a utility, EXC's operations and profitability are highly susceptible to adverse changes in government energy policies, environmental regulations, or rate-setting approvals. 2. Financial Liquidity Risk: The company exhibits potential liquidity constraints, as indicated by current ratios below 1.0, which could challenge its ability to meet short-term obligations despite positive operating cash flow. 3. Persistent Negative Momentum Risk: The stock has shown substantial underperformance relative to the market over a three-month period, suggesting negative investor sentiment or concerns about future prospects that may not be fully offset by recent short-term stability.
Based on the fundamental analysis provided, the EXC stock forecast for 2026 anticipates stable, moderate growth driven by its regulated utility operations.
Target Price & Growth Drivers: My base case target range for 2026 is $48-$52, with a bull case of $55-$60, driven by (1) continued execution on operational improvements to expand margins, (2) the defensive nature of the utility sector attracting investors during economic uncertainty, and (3) potential regulatory approvals for constructive rate cases.
Assumptions & Uncertainty: This forecast assumes successful navigation of the regulatory environment and stable interest rates. However, the outlook is highly sensitive to regulatory policy changes and interest rate fluctuations, which represent significant uncertainties. The capital-intensive model also limits explosive growth potential.