On Monday, Citi confirmed a Buy rating on Consolidated Edison (NYSE:ED) stock, with a price target of $116.00, representing significant upside from the current price of $89.24. According to InvestingPro data, the stock is currently trading near its 52-week low, with analyst targets ranging from $84 to $116. Citi's stance is backed by insights from a policy discussion held in December, focusing on the future of New York's utility markets and broader implications.
The discussion highlighted several expectations for the year 2025. First, energy security and reliability are anticipated to take precedence over sustainability concerns. Secondly, states in the Northeast and West Coast, particularly New York, are expected to bolster policies that facilitate the energy transition.
This includes expanding smart grid pilots, streamlining transmission permitting processes, and implementing Virtual Power Plants (VPPs), along with promoting geothermal and nuclear energy sources.
Lastly, there is a projected emphasis on additionality, which pertains to the creation of new generation capacities. With a beta of 0.37 and a remarkable 50-year streak of consecutive dividend increases, Consolidated Edison offers stability in this evolving landscape.
City believes these developments align with a positive outlook for Consolidated Edison. He suggests that the company may experience an upside to capital expenditures within its subsidiary, Consolidated Edison Company of New York (CECONY), and potentially higher Returns on Equity (ROEs). The analyst also notes that the recent underperformance of peer stocks could further benefit Consolidated Edison.
Furthermore, there is potential for the Heat Act to gain momentum in New York by 2025. The act's progress would likely support Consolidated Edison's position in the market, reinforcing the analyst's bullish perspective on the stock's prospects.
For deeper insights into Consolidated Edison's financial health and growth potential, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and detailed financial metrics that help evaluate the company's long-term value proposition.
In other recent news, Consolidated Edison has undertaken several significant financial strategies. The energy-delivery company has announced a public offering of 7 million shares, to be managed by J.P. Morgan Securities. Proceeds from the offering are intended for investment into its subsidiaries and other corporate needs.
Furthermore, the company has secured a $700 million credit facility, providing financial flexibility for potential future investments. In addition, Consolidated Edison revealed a major debt sale of $1.45 billion in debentures to raise capital.
Analysts have provided updated evaluations of the company. Guggenheim maintained a Neutral rating while raising the stock's price target to $99. BofA Securities increased its price target from $97.00 to $109.00, maintaining a Buy rating. A Citi analyst upgraded the stock rating from Neutral to Buy, and Jefferies initiated coverage with a Hold rating.
In terms of earnings, the company's Q2 2024 report showed an adjusted EPS of $0.59 and an operating revenue of $3.22 billion. Subsidiary Orange and Rockland Utilities proposed new rate plans for 2025-2027, pending approval by the New York State Public Service Commission. The company also announced the appointment of Kirkland B. Andrews as the new CFO. These are the recent developments within Consolidated Edison.
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