Deutsche Bank Downgrades Consolidated Edison (ED) to Sell

Deutsche Bank downgraded Consolidated Edison (NYSE: ED) from Hold to Sell with a price target of $70.00 (from $62.00).

Analyst Jonathan Arnold said, "The company has been one of the best performers in the regulated side of the sector year-to-date (outperforming S&P Utilities by 4.5%) and now trades at one of the highest multiples as well (17.5x vs. sector average of 16.8x). Our downgrade reflects our more cautious stance on the sector and our view that ED is overvalued in the mid 70s. We see ED’s valuation at odds with fundamentals given below average compound annual EPS growth potential (we project 2% CAGR vs. sector average of about 4%) and the absence of any formal management guidance on the long-term outlook. We also continue to believe there is outstanding risk to ED from the 2014 Harlem explosion which was traced to ED’s natural gas infrastructure. The NY PSC has opened an investigation, which is still at early stages, and ED could eventually face some sort of penalty."

For an analyst ratings summary and ratings history on Consolidated Edison click here. For more ratings news on Consolidated Edison click here.

Shares of Consolidated Edison closed at $75.85 yesterday.

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