Exelon is Friday's IBD Stock Of The Day as the Chicago-based energy provider approaches a buy point. EXC stock has maintained a powerful 15-month uptrend despite recent major business changes.
Exelon is the country's largest utility company, serving more than 10 million customers through six fully regulated transmission and distribution utilities. These are Atlantic City Electric, Baltimore Gas and Electric, Commonwealth Edison, Delmarva Power & Light, PECO Energy Company and Potomac Electric Power Company.
Company Shuffle Energizing EXC
Until February, 2022, it not only marketed and distributed energy, but it generated it as well through its Constellation Energy Generation unit. Acquired in 2012 for $7.9 billion, this Baltimore, Md.-based side of the business owns interests in 13 nuclear power plants. Those generation stations produced 20,899 megawatts as of Dec. 31, 2021 for Exelon, making up the vast majority of its generation resources, according to SEC filings.
Fossil fuels, primarily natural gas and oil, ranked second in generation with 8,819 megawatts. Renewables accounted for another 2,680 mw. The company contracted third party generation for an additional 4,100 mw.
In February, Constellation Energy Generation split from EXC, becoming Constellation Energy. Exelon has now become a utility giant strictly distributing energy with electrifying market results.
EXC's initial period after the separation was not perfect as higher interest rates, rising commodity prices and inflation substantially increased the bills of North American utilities. It has also had to weather rising energy prices stemming from Russia's invasion of Ukraine making already soaring inflation climb higher.
In its first-quarter fiscal year 2022 earnings, the company just missed Wall Street estimates on earnings but beat predictions on revenue. EXC reported a 16% increase in earnings per share, to 64 cents, and revenue increased 15% to $5.33 billion. The company's capital expenditures decreased 10% to $1.9 billion from $2.1 billion.
EXC Stock
The company also maintained its full year earnings per share guidance of $2.18 to $2.32.
"The first quarter was a milestone for Exelon as we successfully completed our separation of the generation business and embarked on our path as the nation's premier transmission and distribution utility company," CEO Chris Crane said during an earnings call in early May.
Exelon stock surrendered early gains and slipped 0.5% to 48.73 in Friday's stock market trading.
EXC is holding up well, forming a shallow cup base, finding support at the 50-day/10-week line. The company's relative strength line has been hitting highs until very recently.
The shallow cup base has a 50.81 buy point. However after Friday, it will also show a handle on a weekly chart. After Monday it will have handle on a daily chart. That will give it a lower buy point of 49.96, according to MarketSmith analysis.
Constellation Energy is also in a cup base and is working on a handle. However, it appears to be much more volatile. CEG was up 2.5% to 65.34 in today's market trading.
Exelon ranks fourth in IBD's utility diversified group behind Alliant Energy, NiSource and South Jersey Industries.
EXC has a Composite Rating of 94 out of 99. Meanwhile it has a 96 Relative Strength Rating, an exclusive IBD Stock Checkup measurement for share price movement with a 1 to 99 score. The rating shows how a stock's price performance over the last 52 weeks holds up against all the other stocks in IBD's database.
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