Stock Analysis & Valuation Exelon Corporation (PEO.DE)

• Previous Close: €37.57
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	8.40	-78
Graham Formula	29.40	-22

Strategic Investment Analysis

Company Overview

Exelon Corporation (PEO.DE) is a leading utility services holding company operating in the energy generation, delivery, and marketing sectors across the United States and Canada. Headquartered in Chicago, Illinois, Exelon owns a diverse portfolio of power generation facilities, including nuclear, fossil, wind, hydroelectric, biomass, and solar assets. The company serves a broad customer base, including wholesale and retail electricity buyers, as well as commercial, industrial, governmental, and residential clients. Exelon also provides essential support services such as legal, IT, financial, and engineering solutions. As a key player in the regulated electric utility sector, Exelon plays a critical role in ensuring energy reliability and sustainability. With a market capitalization exceeding €41 billion, Exelon is a major force in North America's energy landscape, balancing traditional and renewable energy sources to meet growing demand.

Investment Summary

Exelon Corporation presents a stable investment opportunity within the utilities sector, supported by its diversified energy portfolio and regulated revenue streams. The company's strong operating cash flow (€5.57 billion) and consistent dividend (€1.41 per share) make it attractive for income-focused investors. However, its high total debt (€46.9 billion) and substantial capital expenditures (€7.1 billion) pose financial risks. The company's low beta (0.588) suggests relative stability compared to broader markets, but regulatory changes and energy transition costs could impact future profitability. Investors should weigh Exelon's reliable cash flows against its significant leverage and exposure to evolving energy policies.

Competitive Analysis

Exelon Corporation holds a competitive advantage through its scale as one of the largest utility companies in the U.S., with a diversified generation mix that includes a leading position in nuclear energy. Its regulated operations provide stable cash flows, while its investments in renewables align with long-term industry trends. However, the company faces intense competition from other major utilities and independent power producers. Exelon's nuclear assets, while low-carbon, require high fixed costs and face political scrutiny. The company's geographic concentration in the Midwest and Mid-Atlantic exposes it to regional regulatory risks. Exelon's integrated model (generation, transmission, and retail) provides operational synergies but also requires balancing competitive and regulated segments. Its ability to navigate energy transition policies while maintaining reliable service will be critical to sustaining its market position against rivals investing aggressively in renewables and grid modernization.

Major Competitors

• NextEra Energy (NEE): NextEra Energy is the world's largest renewable energy producer, with a dominant position in wind and solar. Its Florida Power & Light subsidiary provides stable regulated returns, while its energy resources segment drives growth. NextEra's renewable focus gives it an edge in the energy transition, but its limited nuclear portfolio contrasts with Exelon's strength in that area. NextEra's higher growth profile comes with greater exposure to merchant power prices.
• Duke Energy (DUK): Duke Energy operates across regulated utilities and commercial renewables in the Southeast and Midwest. Its geographic overlap with Exelon creates direct competition in some markets. Duke's larger scale (serving 7.9 million customers) provides advantages, but its slower renewable transition compared to peers may create long-term challenges. Duke's pure-play regulated model offers more stability but less growth potential than Exelon's mixed portfolio.
• Southern Company (SO): Southern Company focuses on regulated utilities in the Southeast, with growing investments in renewables and nuclear (Vogtle plant). Its smaller generation portfolio and regional concentration make it less diversified than Exelon. Southern's recent challenges with nuclear construction highlight the risks Exelon manages successfully with its existing nuclear fleet. Southern's higher dividend yield may appeal to income investors.
• American Electric Power (AEP): AEP operates across 11 states with a mix of regulated utilities and competitive energy businesses. Its transmission network is a key asset, but its slower renewable transition compared to Exelon may become a disadvantage. AEP's smaller scale in generation (particularly nuclear) reduces its competitive position against Exelon in wholesale markets. Both companies face similar regulatory challenges in the Midwest.
• PG&E Corporation (PCG): PG&E operates in California with a pure-play regulated model focused on transmission and distribution. Its lack of generation assets differentiates it from Exelon's integrated approach. PG&E's wildfire liabilities and California regulatory environment create unique risks not shared by Exelon. PG&E's renewable energy procurement mandates exceed Exelon's current mix, potentially pressuring Exelon to accelerate its transition.