UPDATE: Credit Suisse Downgrades Consolidated Edison (ED) to Underperform
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Credit Suisse analyst Michael Weinstein downgraded Consolidated Edison (NYSE: ED) from Neutral to Underperform with a price target of $65.00 (from $75.00).
The analyst comments "We see continued COVID19 cost impact as worse than expected, lasting well into 2021. Furthermore, the company’s projected 4%-6% EPS growth rate is now below large-cap peers despite starting at a low 2021 base $4.25. ED’s 3-year regulatory settlement continues to be a burden on the utility which requires achievement of significant and escalating opex savings simply to achieve an 8.8% authorized ROE that is also well below the national average. We remain concerned regarding NY regulatory treatment of a future recovery request for COVID19 costs and a growing bad debt reserve. ED is considering strategic alternatives for its slow/no-growth midstream segment (50% of Stagecoach) following a pre-tax impairment loss of $320M ($223M after tax) for its interest in the Mountain Valley Pipeline."
Shares of Consolidated Edison closed at $68.18 yesterday.
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