Davenport Downgrades Exelon (EXC) to Neutral; Citing Management's Revised Offer For NRG
EXC Hot Sheet
Rating Summary:4 Buy, 7 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Davenport downgrades Exelon Corp. (NYSE: EXC) from Buy to Neutral
Davenport analyst says, "We are lowering our rating on Exelon to Neutral in the wake of the company’s announcement this morning that it was raising the exchange ratio in its unsolicited offer to acquire NRG Energy (NYSE: NRG) from 0.485 EXC shares to 0.545 EXC shares for each NRG share...Notwithstanding Exelon’s discussion of newly discovered synergies, that it indicated was the basis of its higher offer, we still believe the new transaction to be EPS dilutive to EXC, and not in the best interest of its shareholders... Our pro-forma numbers, which assume $200 million of annualized cost synergies, offset by $87 million in added annual finance costs, as well as $1.1 billion of new common equity, but does not reflect any reduction of margin from assets to be divested, show the new transaction as being EPS dilutive, with our 2010 estimate of $4.14 being reduced to $3.94 on a pro-forma basis, and our 2011 estimate of $4.55 lowered to $4.24 on a pro-forma basis."
To see more analyst ratings on EXC Click Here.
Exelon Corporation (Exelon) is a utility services holding company. It operates through its principal subsidiaries Exelon Generation Company, LLC (Generation), Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO).
Davenport analyst says, "We are lowering our rating on Exelon to Neutral in the wake of the company’s announcement this morning that it was raising the exchange ratio in its unsolicited offer to acquire NRG Energy (NYSE: NRG) from 0.485 EXC shares to 0.545 EXC shares for each NRG share...Notwithstanding Exelon’s discussion of newly discovered synergies, that it indicated was the basis of its higher offer, we still believe the new transaction to be EPS dilutive to EXC, and not in the best interest of its shareholders... Our pro-forma numbers, which assume $200 million of annualized cost synergies, offset by $87 million in added annual finance costs, as well as $1.1 billion of new common equity, but does not reflect any reduction of margin from assets to be divested, show the new transaction as being EPS dilutive, with our 2010 estimate of $4.14 being reduced to $3.94 on a pro-forma basis, and our 2011 estimate of $4.55 lowered to $4.24 on a pro-forma basis."
To see more analyst ratings on EXC Click Here.
Exelon Corporation (Exelon) is a utility services holding company. It operates through its principal subsidiaries Exelon Generation Company, LLC (Generation), Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO).
You May Also Be Interested In
- UPDATE: UBS Downgrades Wisconsin Energy (WEC) to Neutral; Taking Some Off The Table
- KKR (KKR) Said to Be in Talks with Delek Group for Phoenix Holdings Stake
- Citi (C) selling stake in Turkey's Akbank, valued at $1.27B -Bloomberg
Create E-mail Alert Related Categories
Downgrades, Mergers and AcquisitionsRelated Entities
DavenportSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
