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Deutsche Bank Upgrades Exelon to “Buy”; Sees Potential Value After Steep Decline (EXC)

Posted: 11/26/2012 8:36:00 AM
Referenced Stocks: EXC

On Monday analyst at Deutsche Bank upgraded Exelon Corporation ( EXC ) to a "Buy" rating.

The analysts upgraded EXC from "Hold" to "Buy" with a price target of $34, up from $33. The new target is a +19% increase from Friday's closing price of $28.57.

Deutsche Bank commented, "We have been in the negative or cautious camp on EXC all year, most notably given our EPS outlook after the June Analyst Day and views on valuation. With the stock down 34% YTD and 20% this month after CEO Crane cast doubts on dividend sustainability, however, we now see an opportunity for the value investor. EXC has lagged utilities by 11% and the S&P by 20% in November, yet the outlook has actually improved slightly as gas/power prices have strengthened. While our call may be early given dividend tax hike fears and EXC's own unresolved dividend overhang, we now see more risk in being too late."

Exelon shares were up 40 cents, or +1.40%, in premarket trading on Monday.

The Bottom Line
Shares of Exelon Corporation ( EXC ) have a 7.35% dividend yield, based on Friday's closing stock price of $28.57. the stock has technical support in the $23-$24 price area. If the shares can firm up, we see overhead resistance around the $32 price level.

Exelon Corporation ( EXC ) is not recommended at this time, holding a DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .