ED — Consolidated Edison, Inc.

As of 2026-08-27, market sentiment is neutral-to-cautious. The Q2 2026 adjusted EPS of $0.83 versus $0.67 a year earlier was a solid beat, but analysts remain on the sidelines with 18 holds, 7 sells, and only 2 buys, and the consensus price target of $105.25 is slightly below the $106.69 price. Regulatory tightening and negative free cash flow offset the appeal of a 3.25% dividend yield and 52 years of dividend growth.

Revenue is seasonal, but YoY growth is solid and rate-base-driven: Q2 2026 revenue rose 13.2% to $4.07B, operating income jumped 55% to $552M, and EPS rose to $0.83 from $0.68. Q1 2026 EPS was $2.54 versus $2.25 a year earlier. Full-year 2025 EPS was $5.65 versus $5.24 in 2024, up about 7.8%. Margins are stable-to-improving: Q2 2026 operating margin was 13.6% versus 9.9% a year earlier, while Q1 2026 was roughly flat at 23.1% versus 23.4%. This is not a one-off blip or a cyclical trough - it is steady, regulated rate-base expansion.

As of 2026-08-27, ED is fairly valued. TTM P/E is 17.46x versus a 5-year average of 17.91x, and forward P/E on the $6.10 guidance midpoint is about 17.5x. P/S of 2.22x is slightly above the 5-year average of 2.12x. The 3.25% dividend yield is typical for a large regulated utility. The stock is neither cheap nor expensive - it is priced in line with its own history and with modest single-digit EPS growth expectations.

As of 2026-08-27, the price is about equal to earnings power. At $106.69, investors are paying roughly 17.5x trailing and forward earnings, with no meaningful earnings surprise priced in. If ED just hits the $6.00-$6.20 range, fair value is close to the current price; upside would require multiple expansion from lower rates or better regulatory outcomes. Downside support is decent near the low-$100s given the dividend and regulated franchise, but this is not a stock pricing in a turnaround.

As of 2026-08-27, RSI was 42.31 - weak but not oversold. Price was 1.19% below its 20-day SMA, 2.86% below its 50-day SMA, and only 0.36% below its 200-day SMA. That is a range-bound, slightly soft tape rather than a clean downtrend or a fresh buy signal. A new buyer would get a better entry on a reclaim of the 50-day SMA or an RSI closer to 30; the 200-day SMA is the first meaningful support.

• Interest rates: Utility valuations are sensitive to long-term rates, and rising rates increase ED's refinancing costs; falling rates would be a tailwind.
• New York regulatory environment: Chapter 58 rate-case limits, revenue budget caps, and refund provisions structurally cap authorized returns, keeping allowed ROEs below the broader utility average.
• Capital spending program: $37.7B of planned capex through 2030 supports rate-base growth and the 6-7% EPS CAGR target, but requires continuous debt and equity funding.
• Defensive positioning: With a beta of 0.26 and 52 consecutive years of dividend growth, ED is a natural holding for risk-averse and income-focused investors.
• Clean energy transition: New York's climate mandates drive utility investment and provide a long-term growth runway, but with execution and regulatory risk.

• Q3 2026 earnings, expected in early November 2026, for evidence that rate-base growth and operating cash flow are tracking guidance.
• New York rate-case rulings and milestones on transmission projects like Propel NY Energy, which could validate the 6-7% long-term EPS CAGR.
• Further asset divestitures after the Mountain Valley Pipeline and Honeoye Storage sales, which could reduce external funding needs.
• A decline in long-term interest rates, which would make the 3.25% dividend yield relatively more attractive and support multiple expansion.

• Persistent negative free cash flow: TTM FCF was about -$2.1B at Q2 2026, as heavy capex and dividend payments outpace operating cash flow, forcing external capital raises and share dilution.
• Regulatory/political risk: New York's rate caps, refund mandates, and below-average authorized ROEs limit earnings growth and re-rating potential.
• Balance sheet and funding risk: Debt-to-equity is 1.10 and long-term debt has grown to $26.8B; higher interest rates increase interest expense and pressure credit metrics.
• Weather and operational risk: Extreme weather and the aging NYC underground network create revenue variability, storm costs, and potential liability exposure.

As of 2026-08-27, ED is a respectable income stock, not a compelling growth story. At $106.69 with a 3.25% yield, steady rate-base-driven EPS growth, and a 52-year dividend-growth streak, it earns a neutral/hold slot in an income-oriented portfolio. I would not initiate a large position here because valuation is fair and the combination of negative free cash flow, dilution, and NY rate caps limits upside.

I applied a 17.6x P/E multiple - a modest discount to ED's 5-year average P/E of 17.91x, reflecting NY rate caps and heavy funding needs - to the midpoint of 2026 EPS guidance of $6.10, producing a fair value of $107.36.