Exelon Corporation (NASDAQ:EXC) Analysts Just Cut Their EPS Forecasts Substantially

Market forces rained on the parade of Exelon Corporation (NASDAQ:EXC) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from nine analysts covering Exelon is for revenues of US$18b in 2022, implying a substantial 50% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 30% to US$2.23. Prior to this update, the analysts had been forecasting revenues of US$31b and earnings per share (EPS) of US$3.23 in 2022. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Exelon

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to US$54.50. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Exelon analyst has a price target of US$74.00 per share, while the most pessimistic values it at US$39.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Exelon's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 42% by the end of 2022. This indicates a significant reduction from annual growth of 1.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.5% annually for the foreseeable future. It's pretty clear that Exelon's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Exelon. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Exelon's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Exelon.

There might be good reason for analyst bearishness towards Exelon, like its declining profit margins. Learn more, and discover the 4 other warning signs we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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