Consolidated Edison (ED) Funds Electric School Bus Rollout, Is The Stock Still A Bargain?
Consolidated Edison (ED) is in focus after helping fund an electric school bus project in New York City, where First Student, Inc. has finished the first phase of its charging infrastructure rollout.
Recent trading has been softer, with the share price down 3.3% over the past 30 days and 1.7% over 90 days, even as Consolidated Edison posts a 5.3% year to date share price return and a 71.2% five year total shareholder return. This points to long term momentum despite short term cooling as investors weigh projects like the New York electric school bus rollout against ongoing risk and income expectations.
Scan beyond Consolidated Edison and this school bus project by reviewing the hand picked 38 power grid technology and infrastructure stocks that are helping reshape how electricity is delivered and managed.
Recent softness in Consolidated Edison’s share price may hint at cooling enthusiasm rather than a break in the underlying utility story. Is the latest move about fundamentals, or a reset in sentiment as investors think about valuation next?
Preferred P/E of 17.6x for Consolidated Edison: Is it justified?
At recent prices around $105.24, Consolidated Edison screens as slightly cheap on earnings, with several valuation checks pointing to the stock trading at what looks like a discount compared to its peers.
The yardstick doing most of the work here is the P/E ratio. For a regulated utility with steady demand and relatively predictable earnings, P/E is a common way investors compare what they are paying today for each dollar of profit against both the sector and close competitors.
Consolidated Edison carries a P/E of 17.6x. That sits below the peer average of 19.1x and below the Global Integrated Utilities industry average of 18x. It is also below an estimated fair P/E level of 21.3x. Together, these checks suggest the market is pricing the utility at a lower earnings multiple than both its direct group and the level that regression analysis indicates it could reasonably trade toward over time.
Explore the SWS fair ratio for Consolidated Edison.
Result: Price-to-earnings of 17.6x (UNDERVALUED)
Still, the story for Consolidated Edison can change quickly if regulatory decisions reduce allowed returns or if major grid investments run over budget or fall behind schedule.
Find out about the key risks to this Consolidated Edison narrative.
Another View on Consolidated Edison’s Value
Price tells one story for Consolidated Edison, and cash flow tells another. The SWS DCF model estimates fair value at $107.65 per share, only about 2.2% above the current $105.24 price. That points to a stock that screens as only mildly undervalued. Is this a small margin of safety or a fair price for stability?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Consolidated Edison for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 34 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed signals on Consolidated Edison so far. If you want to move quickly and build your own take, start with the 4 key rewards and 2 important warning signs.
Looking for more investment ideas beyond Consolidated Edison?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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