Consolidated Edison, Inc. (ED) Dipped Into Undervalued Territory?

If you can handle volatility, Consolidated Edison, Inc. (NYSE:ED) is the stock to watch now. The stock closed lower on 14 March. The shares dropped -0.2 points or -0.23 percent at $84.98 with a light trade volume of 1.898 million shares. After opening the session at $85.19, the shares went as high as $85.57 and as low as $84.78, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $27.1 billion and now has 319.24 million shares outstanding. Consolidated Edison, Inc. (ED) stock has gained 8.16 percent of market value in 21 trading days.

ED stock has a trailing 3-year beta of 0.1, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.42 a share in the trailing twelve months. The stock’s value has surged 11.14 percent year to date (YTD) against a rise of 12.57 percent in 12 month’s time. The company’s shares still trade -0.57 percent away from its 1-year high of $85.47 and 19.49 percent up from 52-week low of $71.12. The average consensus rating on the company is 3.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Consolidated Edison, Inc. (ED) will probably climb -5.14 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $87-month high price target. This represents a whopping 2.38 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $81, which represents a return potential of -4.68 percent when compared to the closing price of the stock of $84.98 on Thursday, March 14. The lowest price target for the stock is $74 — slightly more than -12.92 percent from ED’s current share price.

History has shown that shares in Consolidated Edison, Inc. have gone up on 18 different earnings reaction days and are predicted to add 0.01 percent when the company reports upcoming earnings. Investors will get their next glimpse of ED’s Q1 earnings on May 02. Analysts are forecasting revenue to climb 0.9 percent to $3.39B in the fiscal first quarter, while earnings are seen soaring by nearly -0.72 percent to $1.37 per share. It earned $0.77 per share, better than the $0.75, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.95B, better than the $2.88B analysts expected. Earnings are estimated to increase by -80.1 percent this year, 5.37 percent next year and continue to increase by 2.99 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $84.65. Below this, the next support is placed in the zone of $84.32. Till the time, the ED stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 78.66 on daily chart, which may remain a cause for concern. If the price breaks below $84.32 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $85.44 mark may result into a pull-back move towards $85.9 level.

Shares of Consolidated Edison, Inc. (ED) are trading at a P/E ratio of 19.28 times earnings reported for the past 12 months. The industry ED operates in has an average P/E of 15.27. Its P/E ratio went as low as 3.84X and as high as 17.87 over the 5-year span.Further, it is sporting a 2.2 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.16. 78.2 percent is the gross profit margin for Consolidated Edison, Inc. and operating margin sits at 21.6 percent. Along with this, the net profit margin is 11.2 percent.