UBS maintains Consolidated Edison stock rating and price target

UBS reiterated its Neutral rating for Consolidated Edison (ED) with a $112 price target following a review of the CECONY rate case, noting a seemingly higher allowed ROE than recent regulatory trends suggested. While revenue increase appeared minimal, ED has a 50-year history of dividend increases, currently yielding 3.25%. BofA Securities raised its price target to $113 with a Buy rating, while Jefferies also increased its target to $113 but maintained a Hold rating, both citing the potential for ED to achieve its EPS growth guidance of 6-7% through 2029 amid ongoing regulatory proceedings.

Analysis

Consolidated Edison (NYSE:ED) has received a reiterated Neutral rating and a $112.00 price target from UBS, with the stock currently trading at $104.22, situated within a broader analyst target range of $90 to $128. This assessment follows a review of the New York Public Service Commission Staff’s recommendation in the CECONY electric and gas rate case, where UBS noted the allowed return on equity (ROE) appears higher than recent New York regulatory model suggestions, despite observing a minimal revenue increase. Contrasting this, InvestingPro data highlights Consolidated Edison's significant 50-year track record of consecutive dividend increases, offering a current yield of 3.25%. Further analyst activity includes BofA Securities raising its price target to $113 with a Buy rating, citing consistent earnings per share (EPS) estimates from 2025 through 2027, and Jefferies increasing its target to $113 while maintaining a Hold rating, positively viewing earnings potential amid ongoing regulatory proceedings; both firms see potential for ED to achieve its 6-7% EPS growth guidance through 2029. The company also announced an agreement with Barclays Capital Inc. for the sale of 6.3 million common shares, with the use of proceeds yet to be disclosed. The regulatory environment, particularly the outcome of the current rate case, remains a critical factor influencing ED's financial outlook.

Key Decisions for Investors

• Investors should carefully monitor the developments and final outcome of the CECONY rate case, as the allowed ROE will significantly impact Consolidated Edison's earnings and ability to achieve its 6-7% EPS growth guidance through 2029.
• The consistent 50-year dividend growth and current 3.25% yield may appeal to income-focused investors, though this should be weighed against the recent share issuance with undisclosed use of proceeds and UBS's observation of minimal revenue increase.
• Given the mixed analyst ratings (Neutral, Buy, Hold) and the pivotal role of regulatory decisions, a balanced approach is warranted, potentially waiting for greater clarity on the rate case before adjusting positions significantly.