Consolidated Edison (ED) has few near-term opportunities for upward revisions to its capital plan, which keeps RBC Capital Markets on the sidelines, the brokerage said.
While the company trades at an estimated 4.5% discount to large-cap peers, RBC said in a Tuesday note that it prefers other names given slower expected earnings growth and limited near-term capital upside through 2030.
Utility-owned renewable generation represents a potential $1.5 to $6 billion opportunity, which could translate to between 1 and 3% earnings per share upside. The investment firm said it does not expect materialization until 2027.
Consolidated Edison expects the New York Public Service Commission to approve the CECONY Joint Proposal in its 2026-28 electric and gas multi-year rate plan at the open meeting on Jan. 22 or Feb. 12. The brokerage said the proposal represents a strong outcome for the company and a settlement decision early next year could serve as a short-term catalyst.
The company is selling its 6.6% Mountain Valley Pipeline stake to Ares Management (ARES) for gross proceeds of $357.5 million. The deal will close in the first half of 2026 and proceeds are expected to partly cover 2026 common equity requirements, diversify the company's portfolio and strengthen its balance sheet, according to the note.
RBC also noted that Consolidated Edison operates in a strong regulatory environment and expects limited impact from the recent New York mayoral campaign focused on affordability.
The firm resumed coverage of the company with a sector perform rating and a $114 price target.
Price: 98.97, Change: -0.36, Percent Change: -0.36
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