Assessing Exelon After Recent Share Price Rally and Strong Quarterly Results in 2025

If you are staring at Exelon’s ticker and wondering what to do next, you are definitely not alone. With a year-to-date climb of 20.4% and five-year returns approaching 94%, Exelon’s stock has been increasingly difficult to ignore for investors seeking both stability and upside. In the last month alone, the share price has jumped 4.4%, while the past week saw a solid 2.8% boost. These moves seem to reflect renewed investor confidence, as recent market developments have signaled a stronger outlook for utilities and infrastructure players like Exelon. Not only is Exelon participating in the shift toward cleaner energy, but investors appear to be reassessing the company’s risk profile and long-term growth potential.

Still, before making a move, it’s smart to step back and look at what the numbers are really telling us. By looking at Exelon through a valuation lens, we can gauge just how much room the stock might have left to run or whether the market has already priced in these recent positives. Exelon currently holds a valuation score of 4 out of 6, meaning it’s considered undervalued in four key checks. But how are these valuations determined, and is there an even sharper way to evaluate whether Exelon is a buy, hold, or sell at this level? Let’s unpack the most common valuation approaches first, then dig into what might be a smarter way to look at the stock’s potential from here.

Exelon delivered 17.0% returns over the last year. See how this stacks up to the rest of the Electric Utilities industry.

Approach 1: Exelon Dividend Discount Model (DDM) Analysis

The Dividend Discount Model, or DDM, estimates a stock's intrinsic value based on projected future dividends, which are then discounted back to their value today. This approach is most relevant for companies with stable and predictable dividend payments.

For Exelon, the DDM framework considers an annual dividend per share of $1.73, a return on equity of 9.22%, and a dividend payout ratio of 61.55%. The model forecasts long-term dividend growth at 3.08%, a figure capped for conservatism and just below initial estimates. This steady growth aligns with Exelon's consistent history of shareholder returns and operational stability within the electric utilities sector.

Based on these inputs, the DDM arrives at an intrinsic value of $46.86 per share. With the DDM implying Exelon is trading at a 3.2% discount relative to this estimate, the current share price is very close to what fundamental dividend projections justify. This slight undervaluation suggests that the stock is, by and large, appropriately priced given its current dividend outlook and sector context.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Exelon.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Exelon's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Exelon Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is widely recognized as a practical valuation tool for profitable companies like Exelon because it ties the company’s market value directly to its earnings power. For earnings-generating businesses, this ratio offers a snapshot of what investors are willing to pay for each dollar the company earns, making it a useful gauge of market expectations about future performance.

It's important to note that what counts as a “normal” or “fair” PE ratio depends on multiple factors, including the company’s expected earnings growth, profitability, and perceived risk profile. For example, higher growth or lower risk can justify a higher PE, while slower growth or greater risk often leads to a lower multiple being deemed appropriate.

Exelon’s current PE ratio is 17.25x, comparing favorably to the industry average of 21.12x and a peer group average of 19.67x. However, using only industry or peer averages to judge valuation can be misleading since these numbers do not fully account for Exelon’s unique characteristics.

This is where Simply Wall St’s Fair Ratio comes in. At 20.76x, the Fair Ratio incorporates not just earnings and sector factors but also considers Exelon’s specific growth prospects, profit margins, and company size relative to the market and industry. By using this comprehensive measure, investors get a more tailored sense of whether the current valuation makes sense.

With Exelon trading at a PE only modestly below its calculated Fair Ratio, there is little in the way of a clear mispricing. The gap is small enough to suggest shares are trading right in line with their fundamental value.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Exelon Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. This approach links a company’s real-world story to financial forecasts and ultimately, a fair value for its shares.

A Narrative is your personal, research-backed story behind the numbers. It is how you connect your assumptions about a company’s future revenue, earnings, and margins to what you believe the stock should be worth.

On Simply Wall St's Community page, Narratives are an easy-to-use tool, helping millions of investors like you put context and conviction into your investment decisions without feeling overwhelmed by data.

By building or following a Narrative, investors can instantly compare their fair value estimate to Exelon’s current price and update their outlook when news or earnings are released. This turns every change in information into a chance to check if the stock is still a buy, hold, or sell.

For example, one investor’s Narrative could see Exelon as a $52 stock with strong growth from energy policy shifts and infrastructure wins. Another may be more cautious, setting fair value closer to $37 because of regulatory and cost uncertainties.

Do you think there's more to the story for Exelon? Create your own Narrative to let the Community know!

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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