Consolidated Edison, Inc. (ED) Catalysts to Go Higher

Consolidated Edison, Inc. (NYSE:ED) is now being followed by Mizuho, as they initiated the stock at Neutral on March 12. Analysts at Evercore ISI, shed their positive views on February 13 by lowering it fromIn-line to Underperform. The stock lost favor of BofA/Merrill analysts who expressed their lack of confidence in it using a downgrade from Buy to Neutral on January 18. Goldman analysts came out with bullish views on November 06 when the call was made. They think the stock is now Neutral compared to to their prior call for Sell.

ED stock dropped -0.23% in recent trade and currently has a stock-market value of $27.13B. The shares finished at $84.98, after trading as low as $84.78 earlier in the session. It hit an intraday high Thursday at $85.57. Trading activity significantly weakened as the volume at ready counter decreased to 1,897,804 shares versus 1,943,660 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,105,790 shares. The stock is now 19.49% above against its bear-market low of $71.12 on June 12, 2018. It has retreated -0.69% since it’s 52-week high of $85.57 reached in March. Now the market price is up 12.57% on the year and up 11.14% YTD.

Wall Street’s most bullish Consolidated Edison, Inc. (NYSE:ED) analysts are predicting the share price to blow past $87 per share during the next 12 months. The current median share price forecast by them is $81, suggesting that the stock could increase -4.68% in that time frame. The average price target of $81.03 calls for a nearly -4.65% increase in the stock price.

Consolidated Edison, Inc. (ED)’s 50 day simple moving average (SMA 50) price is $78.85 and its 200-day simple moving average (SMA 200) price is $78.17. The company’s stock currently has a total float of 319.24M shares. Its weekly volatility is hovering around 1.01% and felt 1.17% volatility in price over a month. On the upside, the share price will test short term resistance at around $85.44. On a downside, the stock is likely to find some support, which begins at $84.65. The failure to get near-term support could push it to $84.32.

When looking at valuations, Consolidated Edison, Inc. (ED) has a pricey P/E of 19.24x as compared to industry average of 13.29x. Moreover, it trades for 18.66 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.6x price/book and 2.2x price/sales. Compared to others, Consolidated Edison, Inc. is in a different league with regards to profitability, having net margins of 11.2%. To put some perspective around this, the industry’s average net margin is 25.62%. ED’s ROE is 8.6%, which is also considerably worse than the industry’s ROE of 16.29%. It’s also not liquid in the near term, with a current ratio of 0.6. The stock has a debt/capital of 1.24.

Shares of ED have gained 6.5% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Consolidated Edison, Inc. (NYSE:ED) has topped consensus earnings estimates in 9 quarters (75%), missed earnings in 3 quarters (25%), whereas at 0 occasion EPS met analyst expectations. ED last reported earnings that exceeded expectations. The company raked in $0.77 per share, -70.72% change on the same period last year. That was better than consensus for $0.75. Revenue for the recent quarter stood at $2.95 billion, down 0% on last year and above the $2.88 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $3.27 billion to $3.56 billion, which should be compared with $0 generated last year. EPS is seen in a range of $1.16 to $1.53, against the $1.47 reported a year ago.