Exelon Slashed to "Sell" at Citigroup; Sees 14% Downside (EXC)

Exelon Slashed to “Sell” at Citigroup; Sees 14% Downside (EXC)


Electric utility operator Exelon Corporation (EXC) on Monday received a big downgrade from analysts at Citigroup.

The firm slashed its rating on EXC from “Neutral” to “Sell” with a $31 price target, suggesting a 14% downside to the stock’s Friday closing price of $36.15.

A Citigroup analyst commented, “Our downgrade and target price reduction is driven by our Street-low forecasted EPS outlook of $2.25 in 2014. This is primarily driven by our inclusion of the pro rata share of CENG O&M costs which were previously not incorporated in our ExGen model and marking our model to market with the 8/29/12 commodity deck. We believe CENG O&M costs are not fully reflected in Street estimates, which could partially explain our below consensus forward estimates. Our downgrade is valuation driven; we have not changed our fundamental view of the Company.”

Exelon shares fell 33 cents, or -0.9%, in premarket trading Monday.

The Bottom Line
Shares of Exelon (EXC) have a 5.81% dividend yield, based on Friday’s closing stock price of $36.15. The stock has technical support in the $32-$33 price area. If the shares can firm up, we see overhead resistance around the $40 price level.

Exelon Corporation (EXC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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