Con Ed cut to Sell at UBS, as earnings pressure could send ROE below 9%

• Consolidated Edison (ED -1.2%) is downgraded to Sell from Neutral with a $49 price target at UBS following recent outperformance with shares experiencing the strongest positive volatility since 2008 despite a lack of positive catalysts.
• The firm believes the return on equity risk at CECoNY and Orange and Rockwood Utilities tips the scale negatively and deserves a discounted multiple.
• The potential near-term pressure on earnings power could move ED's return on equity below 9%, UBS says.