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Consolidated Edison (ED) Could Be 5% Below Fair Value On Its $38b Grid Plan

Simply Wall St · 2d ago

Consolidated Edison (ED) has put a US$38b, five year plan on the table, centered on electrification, grid upgrades, reliability and climate resilience, tying its outlook closely to New York's building and transport electrification push.

The US$38b plan arrives as Consolidated Edison’s share price has eased 5.1% over the past 90 days after a recent 7 day gain of 2.4%. Total shareholder return sits at 7.2% over one year and 63.6% over five years, suggesting longer term holders have seen steadier compounding even as short term momentum cools around the current US$104.64 level, where the market reassesses growth potential and risk around the new investment cycle.

Compare Consolidated Edison’s grid heavy plan with other regulated utilities by scanning our hand picked list of 43 power grid technology and infrastructure stocks to find potential peers and alternatives.

Consolidated Edison shares now trade a little below both intrinsic estimates and analyst targets after that US$38b plan reset expectations. Is this discount cautious pricing on higher execution risk, or an entry point based on regulated earnings visibility?

Most Popular Narrative: 4.6% Undervalued

Consolidated Edison’s most followed narrative pegs fair value at about $109.66. This is modestly above the recent $104.64 close and frames the stock as slightly below that long run estimate based on a 7.24% discount rate.

Planned infrastructure investment of about US$38b over the next five years and US$72b over the next decade at CECONY is expected to expand Consolidated Edison’s regulated asset base, which can support future revenue and earnings tied to that growing rate base.

See why 1 investors see Consolidated Edison as 5% undervalued.

Result: Fair Value of $109.66 (UNDERVALUED)

Still, the narrative around Consolidated Edison can shift quickly if New York tightens earnings sharing caps or if extreme heat events drive up reliability related costs.

Find out about the key risks to this Consolidated Edison narrative.

Next Steps

Mixed signals on Consolidated Edison so far. If you want your own take, move fast and weigh both the 4 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.