CONSOLIDATED EDISON INC (ED): what the price requires

The current priced-in claim for CONSOLIDATED EDISON INC (ED) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ED

Headline

FieldValue
TickerED
CompanyCONSOLIDATED EDISON INC
Current price$111.96/sh
CompositionCECONY Electric 69% / CECONY Gas 19% / CECONY Steam 4% / O&R Electric 6% / O&R Gas 2% / Con Edison Transmission 0% / Other 0%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin today20.1%
Multiple paid19x operating income

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 6.1% cost of capital with 4% terminal growth over a 5-year stage.

Reconcile: at the x-ray's 9.3% required return this reads ~15%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-1.26σ
cohort percentile (of 70 peers)36
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.83x5expensive
Earnings1.34x4expensive
Relative0.94x5justifies
Growth0.72x5justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.5%); the inversion above states its own rate.

Per-Model Detail (n=19)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$246.790.45xyesFCF base $4.4B, growth 8% (input: historical growth), terminal g 4.0%, WACC 9.5%, 6yr projection
DCF Exit MultipleGrowth$155.260.72xyesExit EV/EBITDA: 5.9x / 7.9x / 9.9x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$157.240.71xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.7x / 20.0x / 23.3x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth$443.350.25xyesDPS $3.38, g=8.4% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDMGrowth$75.011.49xyesStage 1: 8% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$63.961.75xyesBV/sh $70.24, ROE (TTM) 8.4%, ke 9.3%
Two-Stage Excess ReturnAsset$61.021.83xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$94.191.19xyesRev $17.4B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.0x / 2.3x / 2.7x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$71.161.57xyesEPS $5.93, growth 8% (input: historical EPS growth), PEG=2.25 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$60.021.87xyesNormalized EBIT (5y avg op income, one-time charges added back) $2.91B × (1−25%) / WACC 9.5% → EPV (no growth)
Residual IncomeAsset$60.541.85xyesBV $70.24 + 5yr PV of (ROE (TTM) 8.4% − Kₑ 9.3%) × BV; BV grows 5.5%/yr
Graham NumberAsset$96.811.16xyes√(22.5 × EPS $5.93 × BVPS $70.24) — Graham's conservative floor
EV/EBITDA RelativeRelative$186.280.60xyesEBITDA $5.32B × sector EV/EBITDA 13.0x
FCF YieldEarnings$119.370.94xyesFCF $4137.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$125.660.89xyesEPS $5.93 × (8.5 + 2×8.4%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$24.444.58xyesBV $70.24 × (ROIC 3.3% / WACC 9.5%)
P/Sales SectorRelative$119.330.94xyesRevenue $17.39B × sector P/S 2.5x
PEG Fair ValueRelative$74.651.50xyesEPS $5.93 × (PEG 1.5 × growth 8.4% (input: historical EPS growth)) → PE 12.6x
Earnings YieldEarnings$64.111.75xyesEPS $5.93 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$27.4b
Net debt / NOPAT (after-tax)10.03x
Net debt / operating income (pre-tax)7.56x
Interest coverage2.9x
Share count CAGR (dilution)0.6%
Burning cashno

Bullet Takeaways

Con Edison is a regulated New York utility valued as an income compounder: it just raised its dividend 4.4% for the 52nd consecutive year (yield above 3%), reaffirmed 2026 adjusted EPS guidance of $6.00 to $6.20, and targets 6% to 7% five-year EPS growth funded by a growing electric and gas rate base.

The price rests on the relative-multiple and growth frames, not the asset frames: trailing return on equity (about 8.4%) sits below the roughly 9.3% cost of equity, so book-return models mark the stock near $60 to $64 against a $106.40 price, and the inversion reads it as priced for stability (below what even a 5% profit decline would warrant).

The structural caution is regulatory ceiling and dilution: profit is capped at allowed return on rate base, the company filed a $2 billion equity offering in May 2026 to fund its capital plan (first-quarter EPS already fell to $2.18 from $2.26 on dilution and higher interest), and the bond-proxy valuation is sensitive to rising long rates given interest coverage near 2.4x.

Bull Case

The balance sheet of a regulated utility tells you almost everything, and Con Edison's says management is confident enough to keep investing through the cycle. Net debt sits near $27.4 billion, large in absolute terms but normal for a utility whose entire model is borrowing to build rate base and earning a regulated return on it. The leverage is supported by exactly what makes a utility safe: a near-monopoly franchise serving New York City and Westchester, revenue that recovers costs and capital through rate mechanisms, and a recently approved three-year rate plan that, in management's words, includes an increase in the authorized return on equity and provides the resources to keep making infrastructure investments. The 10-K spells out the mechanics, describing weighted average cost of capital determined from the authorized common equity ratio and return on common equity, with an authorized after-tax weighted cost of capital around 7% on the rate base (FY2025 10-K, accession 0001047862-26-000031).

The dividend is the clearest signal of that confidence. Con Edison just raised its dividend 4.4%, marking the 52nd consecutive year of increases, one of the longest streaks in the entire market. A board does not extend a half-century dividend record unless it is sure the regulated cash flows will be there, and the current $3.38 annual payout against a $106.40 price puts the yield above 3%. That is a bond-like income stream backed by a franchise that grows with New York's electrification needs.

The forward plan turns the balance sheet into compounding. Con Edison reaffirmed 2026 adjusted EPS guidance of $6.00 to $6.20 and targets five-year adjusted EPS growth of 6% to 7% off that midpoint, funded by rising electric and gas rate base at both CECONY and O&R. In early May 2026 it filed a $2 billion at-the-market equity program to help fund that capital plan, which an earnings beat had already strengthened the case for. Inverting the price shows how undemanding the embedded bet is: at about 19x company-wide operating income, computed at a roughly 6% cost of capital, the price sits below what even a 5% annual decline in operating profit would warrant. For a regulated utility with a growing rate base and a 52-year dividend record, the market is not asking for much.

Bear Case

The structural truth a Con Edison holder would rather not face is that a regulated utility cannot earn more than its regulator allows, no matter how well it operates. The entire business is capped: rate base times allowed return on equity, set by the New York commission, is the ceiling on profit. The 10-K is explicit that the weighted cost of capital is determined from the authorized common equity ratio and return on common equity (FY2025 10-K, accession 0001047862-26-000031), which means the upside is administratively limited and the downside (cost overruns, disallowed expenses, a tougher rate case) is borne by shareholders. Trailing return on equity is only about 8.4%, below the roughly 9.3% cost of equity, so on the full invested base the company is not clearly earning its capital cost, and the ROIC-justified book model marks the stock near $24 against a $106 price (June 27, 2026).

Growth in this model comes with dilution attached. To fund the rate-base expansion that drives the 6% to 7% EPS growth target, Con Edison must continually raise capital, and in early May 2026 it filed a $2 billion at-the-market common equity offering. Issuing shares to fund growth means existing holders are partly funding their own EPS growth, and the first quarter already showed the drag: adjusted EPS fell to $2.18 from $2.26 a year earlier, reflecting higher operations and maintenance costs, higher interest expense, and dilution from share issuance, only partly offset by higher rate base. When the cost of the growth (more shares, more interest) eats into the return on the growth, the net compounding to shareholders is slower than the rate-base headline suggests.

Interest-rate sensitivity is the macro variable with the most leverage, and the price does not obviously reflect it. With interest coverage of only about 2.4x and a debt load near 9x operating income, Con Edison's cost structure is exposed to rates, and a utility's bond-proxy valuation compresses when long rates rise. The asset-based models say the price is already full: simple and two-stage excess return near $61 to $64, residual income near $61, and earnings power value near $60, all far below $106. The price is justified only by the relative-multiple and growth-DCF frames; the asset family says expensive. A holder is paying a premium for the safety and the dividend streak, and at a sub-cost-of-capital return that premium is the risk.

Valuation

Con Edison's models split along the usual utility line. The asset-based frames mark well below the price: simple excess return near $64, two-stage excess return near $61, residual income near $61, and earnings power value near $60, against a $106.40 quote. The reason is straightforward: trailing return on equity (about 8.4%) sits below the roughly 9.3% cost of equity, so models that value the business on its return-versus-cost-of-capital spread see no premium to book (book value per share is $70.24). The ROIC-justified book model is the most severe, near $24, reflecting a return on invested capital around 3.3% on the full base.

The relative and growth frames are what hold the price up. The relative P/E model at a 20x utility multiple marks near $157, the exit-multiple DCF near $151, and the Graham number near $97. The dividend-discount models scatter widely depending on the growth assumption (the two-stage version lands near $75). The price is justified by the relative-multiple and growth families while the asset family says expensive, which is the normal pattern for a regulated utility valued as a stable income compounder rather than on its book-return spread.

Inverting the price gives the most useful read, with a reliability caveat: the solve is low-reliability here, so treat it directionally. At $106.40 the market pays about 19x company-wide operating income at a roughly 6% cost of capital, a multiple so low that the price sits below what even a 5% annual operating-profit decline would warrant. Read as a bound, not a forecast: the market is pricing in stability, not growth heroics, and the multiple sits in the lower half of the peer utility range. That is consistent with management's 6% to 7% EPS growth target funded by rate base. The honest summary: this is a fairly priced regulated income stock where the dividend record and rate-base visibility justify a premium to its book-return value, and the risk is rates and the regulator, not the operations.

Catalysts

The most recent print was the first-quarter 2026 report. Revenue rose 6.2% to $5.1 billion, ahead of expectations, with operating-income gains at both CECONY and O&R. Adjusted earnings were $790 million, or $2.18 per share, slightly below the prior-year $2.26, reflecting higher operations and maintenance costs, higher interest expense, and dilution from share issuance, partly offset by higher electric and gas rate base. Con Edison reaffirmed full-year 2026 adjusted EPS guidance of $6.00 to $6.20, and at least one analyst (Scotiabank) raised its price target on the beat.

Two capital-side events are the near-term catalysts. First, the recently approved three-year New York rate plan, which includes an increase in the authorized return on equity, sets the rate base and allowed return that drive earnings for the next several years. Second, in early May 2026 the company filed a $2 billion at-the-market common equity offering to help fund its capital plan; the pace and pricing of that issuance affect dilution and are worth watching.

The forward thesis tracks regulation, rates, and the dividend. The company targets 6% to 7% five-year adjusted EPS growth off the 2026 midpoint, contingent on executing the rate-base plan within the allowed return. The leverage points are interest rates (a utility's valuation and interest expense both move with them), the outcome of future rate cases, and the continuation of the 52-year dividend-growth streak. Watch the quarterly EPS against the $6.00 to $6.20 guide, the equity-issuance cadence, and any regulatory developments on allowed ROE, since those, not operating performance, set the ceiling on returns.

Sources: Con Edison Q1 2026 results and 8-K (stocktitan.net); Scotiabank price-target note (Investing.com); Simply Wall St coverage of the Q1 beat and $2 billion equity plan; Con Edison dividend history (stockinvest.us).

Peer Cohorts (Per Segment, With Filing Citations)

CECONY (regulated utility) (reported)

O&R (regulated utility) (reported)

Con Edison Transmission (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive ED report on boothcheck