Con Edison remains one of the green transition leaders

Ticker: ED

Author: Stock Analyst  Date: 2021/05/05

New York City power grid company Consolidated Edison will release financial results for its fiscal first quarter on Thursday, May 6. Reuters consensus on the company's refined EPS for January-March is $1.36 (+ 0.7% y / y).

A severe blizzard in late February and early March affected the company's service areas (New York and Westchester County), causing massive wind gusts and record snowfalls that resulted in network outages, power outages and increased recovery costs.

On the other hand, the temperature in the largest US metropolis in the first three months was on average below the climatic norm, which should become a supporting factor for the company's revenue. These factors confirm that EPS is likely to come out roughly on par with the consensus. Note that the company is currently one of the greenest in the industry: in April 2021, the non-profit organization The Smart Electric Power Alliance recognized Con Edison as a leader among US energy companies for its efforts to create a clean, carbon-free energy system.

Our current recommendation for ED shares is "Hold" with a target of $84.90, which corresponds to a potential of 8.7% excluding dividends. The expected dividend yield in 2021 is around 4%.