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Consolidated Edison (NYSE:ED) +1.1% in Friday's trading as Bank of America upgraded the stock to Buy from Neutral with a $103 price target, raised from $92, after New York state regulators approved the joint proposal settlement for electric and gas rate cases at this week's open meeting.
BofA's Julien Dumoulin-Smith said the settlement "provides rare certainty and a regulatory de-risk through 2025."
The joint proposal supports a capital plan in the 2023-25 rate period for the electric and gas utilities exceeding $13B, up 26% over the prior three-year rate period, which includes initiatives approved outside of the rate case process, including $780M for Reliable Clean City, the analyst said.
An additional $810M for the Brooklyn Clean Energy Hub is approved and likely will be deployed starting in 2024, indicating a pattern that along with ambitious clean energy goals at the state level suggests more capital to come, according to Dumoulin-Smith.
"With a nearly 100% regulated business, the company represents pure-play exposure with minimal regulatory risk other than the comparably small Steam rate case," the analyst wrote.
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