Utilities Select Sector

S&P 500

The Balanced Allocator

Comparable Companies - ED

4 discretionary insider purchases and 2 discretionary insider sales reported in the last 12 months. Latest short interest is 2.4% of float as of 2026-02-13. Primary institutional holders are Vanguard Group Inc at 12.6% and BlackRock Inc at 11.0%.

VP & CONTROLLER

DIRECTOR

Assumed CEO role in January 2021; added Chairman title in January 2022.

Chairman, President & Chief Executive Officer

Appointed CFO in July 2024, succeeding Robert Hoglund.

Senior Vice President & Chief Financial Officer

Promoted to President of the primary utility subsidiary in 2021.

President, Consolidated Edison Company of New York, Inc.

Joined Con Edison as General Counsel in early 2020.

Senior Vice President & General Counsel

Newly appointed CIO as of late 2024, joining from Verizon.

Senior Vice President & Chief Information Officer

Transitioned from President of O&R to Shared Services lead in April 2024.

President of Shared Services, CECONY

Timothy Cawley

Kirkland Andrews

John F. Killian

Michael W. Ranger

Timothy Cawley represents a stable, internal-successor leadership model. His tenure is defined by the strategic pivot away from competitive renewable generation (the $6.8B RWE sale) back toward regulated utility infrastructure. This move significantly de-risked the balance sheet and aligned the company with New York State's aggressive decarbonization mandates. His 'provenance' is rooted in operational execution within the highly regulated New York market, making him a specialist in navigating complex multi-year rate cases and state-level political environments.

Divestiture of Con Edison Clean Energy Businesses to RWE

Kirkland Andrews is a high-caliber financial strategist with a proven track record of navigating activist pressure and executing large-scale M&A. His appointment at Con Edison in 2024 signals a potential shift toward more aggressive balance sheet management and sophisticated capital recycling. Unlike his predecessor, Andrews brings 'outsider' experience from competitive power markets (NRG) and activist-influenced utilities (Evergy), suggesting he was hired to optimize Con Ed's valuation and capital efficiency as it funds a multi-decade transition to a green grid.

Brendan Cavanagh

Catherine Zoi

Deirdre Stanley

Dwight A. McBride

Karol V. Mason

William J. Mulrow

Linda S. Sanford

L. Frederick Sutherland

PSEG operates regulated transmission and distribution businesses and a competitive generation segment, earning returns on rate base investments.

Entergy operates vertically integrated utilities with generation, transmission, and distribution, alongside competitive wholesale operations, supported by regulatory recovery mechanisms.

Southern Company is a vertically integrated utility with traditional electric operating companies, a competitive wholesale generation business (Southern Power), and natural gas distribution (Southern Company Gas).

WEC Energy Group is a diversified holding company with regulated natural gas and electricity utilities, renewable energy investments, and nonregulated energy infrastructure.

Con Edison operates 533 circuit miles of electric transmission lines, 15 transmission substations, 64 distribution substations, 87,564 in-service line transformers, 3,924 pole miles of overhead distribution lines, 2,291 miles of underground distribution lines, 4,350 miles of natural-gas mains and 377,971 service lines. The company also owns electric, gas and steam generation and distribution facilities, a liquefaction and storage facility at Astoria, and participates in joint transmission projects such as Propel NY Energy.

Consolidated Edison, a regulated utility with 10.9% revenue growth to $16.9B driven by rate-plan adjustments yet low ROIC of 2.2% and marginal FCF of $36M after 28% revenue CapEx, is led by a management team strong in regulated asset operations but hampered by undisclosed incentives and modest capital efficiency; exceptional track record in utility execution and capital recycling offsets weaker alignment and governance details, positioning the team as adequately suited for steady grid modernization amid high leverage of 117% Debt/Equity.

Con Edison disclosed material environmental compliance risks including federal and state regulations such as the Clean Air Act, New York's Climate Leadership and Community Protection Act (CLCPA), New York City's Climate Mobilization Act, and the Regional Greenhouse Gas Initiative (RGGI). The company faces potential costs from emissions compliance, climate resilience investments, and remediation of hazardous substances like PCBs and coal tar at manufactured gas sites and Superfund sites. Litigation and regulatory changes, including the EPA's Section 111 rule and Good Neighbor Rule, create uncertainties. The Climate Change Superfund Act may impose additional obligations, though Con Edison is not a responsible party under its definition.

As of December 31, 2025, Con Edison had 15,407 employees, with 14,166 at CECONY, 1,232 at O&R, and 9 at Con Edison Transmission. 7,942 CECONY employees and 599 O&R employees were covered by collective bargaining agreements. The turnover rate in 2025 was 5.4%, with 36% due to retirements. Average employee service length is 13.0 years. Employees spent over 670,000 hours in training during 2025.

Con Edison disclosed policies for customer compensation during prolonged outages, including bill credits and reimbursement for food and prescription spoilage. The company is subject to regulations protecting customer privacy, particularly regarding consumption data, and has implemented cybersecurity measures to safeguard customer information.

Con Edison disclosed risks related to supply chain disruptions, inflation, and tariffs affecting material costs and equipment availability. The company participates in energy affordability programs, including the Enhanced Energy Affordability Program (EEAP) to assist low-income customers with energy bills. Third-party risk assessments are conducted for vendors and suppliers.

Revenue grew 10.9% to $16.9 bn in FY 2025, but gross margin slipped to 53.3% and operating margin to 17.3%, free cash flow turned barely positive, leverage sits at 117% debt‑to‑equity and ROIC remains around 2%, well below the 10% cost of capital.

The company’s Innovation Dossier describes CapEx as focused on grid modernization, offshore‑wind integration, new transmission corridors (e.g., Propel NY Energy), and environmental‑protection facilities, aligning with the stated $72 bn clean‑energy capex target through 2034.

A $10 m impairment loss on the Honeoye investment was recorded in FY 2025, and the auditor flagged regulatory‑asset valuation as a Critical Audit Matter, but no other material impairments were disclosed.

CapEx is directed toward grid modernization, offshore‑wind integration, and new transmission projects, yet the incremental return of 4.1% indicates that these investments are not generating value above the firm’s hurdle rate, implying capital destruction relative to cost of capital.

Senior Unsecured Debentures (multiple series)

364-Day Revolving Credit Agreement (CECONY)

364-Day Senior Unsecured Term Loan Credit Agreement (Nov 2025)

364-Day Senior Unsecured Delayed Draw Term Loan Credit Agreement (Nov 2024)

Con Edison & Utilities $2.5 B Credit Agreement (Revolving)

EV/EBITDA

Deneen Lynette Donnley

Senior VP & General Counsel

Senior VP & CFO

Matthew Ketschke

President of Consolidated Edison Company of New York, Inc.

Robert Sanchez

President of Shared Services of Con Edison of New York

Timothy P. Cawley

Michele O'Connell

Stuart Nachmias

Deneen L. Donnley

Jennifer Hensley

Joseph Miller

Kamran Ziaee

Consolidated Edison, Inc. is a holding company that owns Consolidated Edison Company of New York, Inc. (CECONY), Orange & Rockland Utilities, Inc. (O&R) and Con Edison Transmission, Inc. CECONY provides regulated electric, gas and steam services to approximately 3.7 million customers in New York City, Westchester County and Manhattan. O&R delivers regulated electric and gas service to customers in southeastern New York State and northern New Jersey. Con Edison Transmission develops, invests in and owns electric transmission projects and related gas assets. The Companies operate under extensive federal, state and local regulation and seek to provide safe, reliable, and clean energy services.

Regulated electric, gas and steam delivery utility serving New York City, Westchester County and Manhattan.

Regulated electric and gas delivery utility serving southeastern New York State and northern New Jersey.

Develops, invests in, and owns electric transmission projects and joint-venture gas assets.

Held base growth, terminal multiple, WACC 10.0% constant; solved for avg FCFF required for current price 110.71 implying yield on TBV 23784.0.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - ED

The utility industry is currently in an 'Infrastructure Super-Cycle,' with peers investing heavily to meet data center and industrial demand. Consolidated Edison is outperforming on top-line growth (10.9% vs 9.4% industry median) but underperforming on operating efficiency, as its 17.3% margin trails the 24.2% peer average.

Consolidated Edison is relevant for analysis at this moment due to the recent appointment of a strategically-focused CFO and the commencement of a massive five-year capital cycle that will test its balance sheet and regulatory relationships.

Rate Case Approvals Successful approval of pending rate cases is critical to offset the $236 million increase in property taxes and fund the $37 billion capex program.

Asset Monetization (Mountain Valley Pipeline) The scheduled sale of the Mountain Valley Pipeline interest for $357.5 million in early 2026 will provide non-dilutive capital for reinvestment.

Regulatory Lag and Cost Recovery The risk that the New York Public Service Commission delays or trims rate hikes, preventing the company from recovering its $37 billion in planned capital expenditures.

Interest Rate Sensitivity As a highly leveraged Asset-Based Operator with $28.4 billion in debt, rising interest rates significantly increase financing costs and pressure the equity valuation.

Stewardship is adequate, but the lack of disclosure regarding specific incentive metrics for the STI and LTI plans is a red flag that prevents full verification of alignment with shareholder returns. The Governance Outcome Tree suggests: 1. Status Quo: Continued 2% ROIC and range-bound stock; 2. Strategic Optimization: CFO Andrews executes further asset sales or capital recycling, leading to a re-rating toward the...

The current asset base of Consolidated Edison is dominated by regulated utility infrastructure serving New York City and Westchester County. As of December 31, 2025, the core Property, Plant & Equipment (PP&E) includes 55,402,000,000 in Net Utility Plant, which encompasses 100,371 miles of underground electric distribution lines (the longest such system in the United States), 38,219 miles of overhead distribution lines, 1,260 miles of transmission circuits, and 63 area distribution substations. The footprint also includes gas infrastructure with 4,374 miles of mains and 379,939 service lines, alongside a steam system capable of delivering 11.2 million pounds of steam per hour. Recent asset trajectory analysis confirms the divestiture of the Clean Energy Businesses in 2023 and the scheduled sale of the Mountain Valley Pipeline interest in early 2026 for 357,500,000, shifting the focus entirely toward core regulated utility delivery assets in high-density urban environments.

Enbridge Inc. acquired three regulated natural gas utilities from Dominion Energy (Questar, Wexpro, and Ohio/NC operations) for an aggregate value of approximately 14,000,000,000, representing a transaction multiple of approximately 1.3x to 1.5x of the estimated regulated asset base.

PPL Corporation completed the acquisition of The Narragansett Electric Company from National Grid for 5,300,000,000, which represented a significant premium over the regulated asset base, reflecting the high value of established electric and gas distribution territories.

Cash & Equivalents

Accounts Receivable

Consolidated Edison's inventory of 530,000,000 is highly liquid compared to typical industrial firms due to the significant portion of energy commodities (fuel oil and gas in storage). The high TTM turnover of 15.89x confirms that the stock is not stagnant. In an orderly liquidation, the energy commodities would be easily cleared at near-market rates, while the materials and supplies would likely be absorbed by regional utility peers who use similar standardized components for grid maintenance. The blended recovery range of 50% to 90% reflects the varying liquidity between the fungible energy products and the specialized infrastructure hardware.

Inventory

Other Current Assets

Net PP&E

Tax Assets (Deferred)

Intangibles

Long-Term Inv.

Other Non-Current

Accounts Payable

Current Debt

Other Current Liabilities

Non-Current Debt

Deposits

Tax Liabilities (Deferred)

Other Non-Current Liabilities

Consolidated Edison (ED) PT Raised to $104 at BofA Securities

Consolidated Edison price target raised to $110 from $100 at Barclays

Consolidated Edison price target raised to $118 from $112 at Mizuho

Consolidated Edison price target raised to $117 from $113 at Scotiabank

Consolidated Edison price target raised to $112 from $108 at UBS

Consolidated Edison price target raised to $96 from $92 at Morgan Stanley

Consolidated Edison price target lowered to $95 from $99 at Wells Fargo

Consolidated Edison price target lowered to $86 from $90 at KeyBanc

Consolidated Edison initiated with an In Line at Evercore ISI

Consolidated Edison price target raised to $166 from $158 at Barclays

Consolidated Edison price target raised to $105 from $104 at UBS

Consolidated Edison price target lowered to $104 from $112 at UBS

Consolidated Edison price target lowered to $92 from $98 at Morgan Stanley

Consolidated Edison price target lowered to $98 from $100 at Morgan Stanley

Consolidated Edison initiated with an Equal Weight at Wells Fargo

Consolidated Edison price target raised to $100 from $93 at Morgan Stanley

Consolidated Edison price target lowered to $105 from $107 at Barclays

Consolidated Edison price target raised to $90 from $88 at KeyBanc

Consolidated Edison price target lowered to $93 from $95 at Morgan Stanley

Situation: Current price is $110.71 versus fair value $100.38 (-9.3% expected return), and valuation confidence is stable. Debate: Bull case depends on Rate Case Approvals Successful approval of pending rate cases is critical to offset the $236 million increase in property taxes and fund the $37 billion capex program. Bear case centers on Regulatory Lag and Cost Recovery The risk that the New York Public Service Commission delays or trims rate hikes, preventing the company from recovering its $37 billion in planned capital expenditures. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.

Executive Summary

The primary value driver is the expansion of the regulated asset base through a $37 billion five-year capital program, which is expected to be unlocked by favorable rate case rulings that allow for cost recovery and a regulated return. Downside protection is anchored by $55.9 billion in net utility plant assets, providing a tangible floor in a highly fragmented but essential infrastructure market.<ul><li>Driver: Regulated Asset Base Expansion</li><li>Catalyst: Rate Case Approvals</li><li>Protection: Tangible Asset Floor</li></ul>Our variant perception is that the market is mispricing the quality and stability of the asset's cash flows due to an overblown concern regarding regulatory lag in New York. While the market focuses on short-term margin compression-with operating margins slipping 20 basis points to 17.3%-we view this as a temporary friction in a long-term capital return story where the monopoly status of the New York City grid provides a hard valuation floor that the market currently ignores in favor of earnings volatility.This is an investment in a durable, cash-flowing asset portfolio, where the primary bet is on the stability of those cash flows and a potential re-rating to a more appropriate yield-based valuation as the company completes its strategic pivot toward green infrastructure.

Core Investment Rationale

Consolidated Edison operates as a regulated utility holding company, primarily serving the high-density New York City and Westchester County markets. The business model is centered on the delivery of electricity, natural gas, and steam, with revenue generated through regulated rate structures that provide a return on invested capital. Strategy is currently focused on the Clean Energy Commitment, which involves massive reinvestment in grid modernization and offshore wind transmission to meet New York State's decarbonization mandates. Revenue grew 10.9% YoY to $16.9 billion in 2025, driven largely by rate-plan adjustments and commodity cost pass-throughs.The company's core value resides in its massive physical infrastructure, including 533 circuit miles of transmission lines, 64 distribution substations, and 100,371 miles of underground electric distribution lines-the longest such system in the United States. These assets are recorded at a net book value of $55.9 billion. The portfolio also includes a unique steam system serving Manhattan and a gas distribution network with 4,350 miles of mains. These tangible, monetizable assets represent approximately 75% of the total asset base, providing a significant valuation anchor.Consolidated Edison operates as a regulated monopoly within its service territories, facing no direct competition for delivery services. In the broader utility sector, it competes for capital against peers like Public Service Enterprise Group (PEG) and Southern Company (SO). While ED's operating margin of 17.3% is below the peer median of 24.6%, its gross margin of 53.3% is significantly higher than the peer average of 39.7%, reflecting the unique pricing power and density of its New York City footprint.The historical situation is defined by a strategic pivot away from competitive energy markets back to core regulated operations. In March 2023, the company completed the $6.8 billion sale of its Clean Energy Businesses to RWE, using the proceeds to de-risk the balance sheet and fund its core utility capital requirements. This divestiture streamlined the company into a pure-play regulated operator. Currently, the company is navigating a leadership transition with CFO Kirkland Andrews joining in 2024 to optimize capital allocation during a peak reinvestment cycle. The defining context for investors today is the execution of a $37.1 billion five-year capital plan, which must be balanced against a debt-to-equity ratio of 117.3% and a rising interest rate environment.

Business & Situation

<ul><li>Bull Case: The regulated monopoly in NYC provides a non-replicable moat with a $55.9B asset base; the strategic shift to green infrastructure (offshore wind/EVs) positions the company as a critical enabler of state mandates; and the 10.9% revenue growth demonstrates strong pricing power through rate adjustments.</li><li>Bear Case: ROIC of 2.2% remains well below the 10% cost of capital, indicating value destruction; high leverage (117% D/E) and peak capex intensity (28% of revenue) limit free cash flow and dividend flexibility; and regulatory lag in New York frequently trims requested rate hikes.</li></ul>The consensus view is that Consolidated Edison is a safe-haven utility with a stable dividend, but one that is currently hampered by high capital requirements and a challenging regulatory environment in New York. This has led to a valuation that trades at a discount to peers on an EV/EBITDA basis (10.9x vs 13.4x median) but at a premium to its own historical intrinsic value. Macro headwinds include rising interest rates, which increase the cost of servicing its $28.4 billion debt load, and supply chain disruptions for critical equipment like transformers.The utility industry is currently in an 'Infrastructure Super-Cycle,' with peers investing heavily to meet data center and industrial demand. Consolidated Edison is outperforming on top-line growth (10.9% vs 9.4% industry median) but underperforming on operating efficiency, as its 17.3% margin trails the 24.2% peer average.Our differentiated view is that the market is mispricing the quality and stability of the asset's cash flows. While bears focus on the 2.2% ROIC, they miss the fact that the company's gross margin of 53.3% is 13 percentage points above the peer median, indicating a superior structural moat. Furthermore, the recent appointment of Kirkland Andrews as CFO-who has a history of navigating activist pressure at Evergy and NRG-suggests a shift toward more aggressive capital recycling and balance sheet optimization that could unlock significant equity value. The current valuation floor is anchored to a Net Liquidation Value of $35.39, but the private market value of these assets, as seen in recent transactions like the Enbridge/Dominion deal at 1.3x net plant, suggests the intrinsic value is much higher than a simple liquidation analysis would imply.The debate ultimately hinges on whether the company can translate its massive asset base into higher-quality earnings. While the moat is widening, the current financial strain from the capex cycle makes the stock unattractive at $110.71. We expect the stock to remain range-bound until there is clearer evidence of ROIC improvement or a more favorable rate case outcome.Our analytical edge is a more detailed understanding of the regulatory framework and the private market value of NYC utility assets. By applying an Asset-Based Operator lens, we recognize that the liquidation value of the grid provides a hard floor that is significantly more robust than the market's focus on short-term operational volatility suggests.

Core Thesis

CEO Timothy Cawley is a 'utility lifer' with a strong operational track record, having overseen $3 billion in annual capital investments as President of CECONY before becoming CEO in 2021. He successfully led the $6.8 billion divestiture of the Clean Energy Businesses in 2023, which de-risked the balance sheet. CFO Kirkland Andrews, appointed in 2024, brings extensive experience in capital recycling and navigating activist pressure from his tenures at Evergy and NRG. This combination of internal operational expertise and external financial strategy is well-suited for the current transition.Capital allocation skill is adequate but constrained by the regulated nature of the business. Management demonstrated opportunistic timing with a $1.0 billion share buyback in 2023 at 9.2x EV/EBITDA, which has yielded an 18.8% ROI. However, the overall ROIC of 2.2% remains a significant drag on the valuation.Management maintains high credibility in its communications, with a 74% revenue hit rate and 84% EPS hit rate over the last 19 quarters. Transcripts reflect a candid assessment of regulatory challenges and cost pressures, such as the $236 million increase in property taxes.<ul><li>Board Independence: Majority Independent (Implied)</li><li>Chairman/CEO Roles: Combined (Timothy Cawley)</li><li>Chairman Tenure: 4 Years</li><li>Insider Ownership: 0.14%</li><li>Shareholder Rights: Audit Committee Oversight of Cybersecurity</li></ul>Stewardship is adequate, but the lack of disclosure regarding specific incentive metrics for the STI and LTI plans is a red flag that prevents full verification of alignment with shareholder returns. The Governance Outcome Tree suggests: 1. Status Quo: Continued 2% ROIC and range-bound stock; 2. Strategic Optimization: CFO Andrews executes further asset sales or capital recycling, leading to a re-rating toward the $127 peer-based target; 3. Regulatory Reset: Adverse rate rulings force a dividend cut, testing the $35 NLV floor.

Leadership & Governance

The valuation floor is anchored to the Net Liquidation Value (NLV) of $35.39. This represents a conservative estimate of the utility plant's value at 1.0x net book value, assuming an orderly transfer of regulated assets. Given the stock trades significantly above this level, the floor reflects the ultimate downside risk in a distressed scenario.The base case assumes 4.2% revenue growth and stable operating margins of 17.4%, driven by successful rate case execution and disciplined capex deployment. This yields a fair value of $100.38.The bull case assumes 8% revenue growth and 19% operating margins through successful offshore wind integration and Propel NY Energy utilization. Blue-Sky Potential is $127.86.The bear case is anchored to the Net Liquidation Value (NLV) of $35.39. This assumes regulatory friction or stranded asset risks in the gas segment lead to a 30% discount to net book value, though the essential nature of the NYC grid makes this scenario unlikely.

Valuation Context

<ul><li>Rate Case Approvals Successful approval of pending rate cases is critical to offset the $236 million increase in property taxes and fund the $37 billion capex program.</li><li>Asset Monetization (Mountain Valley Pipeline) The scheduled sale of the Mountain Valley Pipeline interest for $357.5 million in early 2026 will provide non-dilutive capital for reinvestment.</li><li>Consolidated Edison is relevant for analysis at this moment due to the recent appointment of a strategically-focused CFO and the commencement of a massive five-year capital cycle that will test its balance sheet and regulatory relationships.</li></ul>Consolidated Edison is relevant for analysis at this moment due to the recent appointment of a strategically-focused CFO and the commencement of a massive five-year capital cycle that will test its balance sheet and regulatory relationships.

Catalyst Path & Context

<ul><li>Regulatory Lag and Cost Recovery The risk that the New York Public Service Commission delays or trims rate hikes, preventing the company from recovering its $37 billion in planned capital expenditures. Operating margins fell 20 basis points to 17.3% in 2025 despite a 10.9% revenue increase, indicating that cost pressures are outpacing rate adjustments.</li><li>Interest Rate Sensitivity As a highly leveraged Asset-Based Operator with $28.4 billion in debt, rising interest rates significantly increase financing costs and pressure the equity valuation. Interest expense rose to $1.23 billion in 2025, and the debt-to-equity ratio remains high at 117.3%.</li><li>Stewardship is adequate, but the lack of disclosure regarding specific incentive metrics for the STI and LTI plans is a red flag that prevents full verification of alignment with shareholder returns. The Governance Outcome Tree suggests: 1. Status Quo: Continued 2% ROIC and range-bound stock; 2. Strategic Optimization: CFO Andrews executes further asset sales or capital recycling, leading to a re-rating toward the... Risk monitor: Current price $110.71 vs fair value $100.38, expected return -9.3%.</li></ul>

Primary Risks

<ul><li>Entry Target: Calculated threshold price required to restore a 30% expected return based on internal valuation.</li><li>Stop Loss: Stop-loss is set as a thesis-risk tripwire for position risk management.</li><li>Position Size: Final size 'Starter' reflects Medium conviction adjusted for the Asset-Based_Operator structural cap and valuation reliability.</li><li>Time Horizon: Time horizon aligns with catalyst realization timeline and archetype cycle length.</li></ul><ul><li>Management's commentary indicates that the FY 2025 revenue lift included a $584 million addition from the electric rate-plan adjustment.</li><li>The sale is scheduled for early 2026 as disclosed in the asset identification dossier.</li><li>Operating margins fell 20 basis points to 17.3% in 2025 despite a 10.9% revenue increase, indicating that cost pressures are outpacing rate adjustments.</li></ul>A permanent, negative change to the regulatory framework in New York that irreversibly impairs the company's ability to earn a return on its core utility assets. Also require valuation reliability to improve before re-entering.

Actionable Parameters & Monitoring

ED offers moderate upside (fair value $100.38 vs current $110.71, expected return -9.3%) and a floor near $35.39. Recommendation: Hold for better entry or stronger conviction.

Final Conclusion

Driver

Catalyst

Protection

The regulated monopoly in NYC provides a non-replicable moat with a $55.9B asset base; the strategic shift to green infrastructure (offshore wind/EVs) positions the company as a critical enabler of state mandates; and the 10.9% revenue growth demonstrates strong pricing power through rate adjustments.

Bull Case

ROIC of 2.2% remains well below the 10% cost of capital, indicating value destruction; high leverage (117% D/E) and peak capex intensity (28% of revenue) limit free cash flow and dividend flexibility; and regulatory lag in New York frequently trims requested rate hikes.

Bear Case

Situation: Current price is $110.71 versus fair value $100.38 (-9.3% expected return), and valuation confidence is stable. Debate: Bull case depends on Rate Case Approvals Successful approval of pending rate cases is critical to offset the $236 million increase in property taxes and fund the $37 billion capex program. Bear case centers on Regulatory Lag and Cost Recovery The risk that the New York Public Service Commission delays or trims rate hikes, preventing the company from recovering its $37 billion in planned capital expenditures. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.

Method	Implied Value	Weight	Weighted Value
Comps	$127.86	65%	$83.11
Historicals	$84.21	10%	$8.42
NLV	$35.39	25%	$8.85
Total Weighted			$100.38

ED

Company Overview

Price History