Deutsche Bank Downgrades Exelon to "Hold" (EXC)

Deutsche Bank Downgrades Exelon to “Hold” (EXC)


According to Deutsche Bank analysts, Exelon Corporation (EXC) is facing headwinds that have negative implications for its financial outlook and any potential upside. As such, the analysts downgraded the utilities company on Tuesday.

The analysts downgraded EXC from “Buy” to “Hold” and see shares reaching $34, down from the previous view of $38. This new price target suggests a slight downside to Friday’s closing price of $34.65.

Deutsche Bank analyst Jonathan Arnold commented, “We upgraded EXC to Buy in late November as we saw an eventual dividend cut as both priced in and value-accretive, and viewed EXC’s optionality to a power market recovery as undervalued. While we still view the simplicity of EXC’s power story and commodity leverage as appealing, we are stepping to the sidelines as we cannot ignore the thesis-altering implications of Friday’s PJM capacity auction results. EXC now faces headwinds in 2016-17 from a material step down in RPM revenues. More importantly, another surge of new committed gas plants and imports in 2016 is a big risk that may offset energy price upside expected from coal plant retirements.”

In November, Exelon was one of’s 5 Dividend Traps to Avoid in 2013.

Exelon shares were down $1.65, or -4.76%, during pre-market trading on Tuesday. The stock is up +16.51% year-to-date.

The Bottom Line
Shares of Exelon Corp (EXC) have a dividend yield of 3.58% based on Friday’s closing price of $34.65 and the company’s annualized dividend payout of $1.24 per share.

Exelon Corporation (EXC) is not recommended at this time, holding a DARS™ Rating of 3.0 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.