Consolidated Edison ED

Reference table

1. What it is

Consolidated Edison, Inc. (NYSE: ED) is one of the oldest investor-owned utilities in the United States (founded 1823). Through its principal subsidiary CECONY (Consolidated Edison Company of New York) and Orange & Rockland (O&R), it delivers:

• Electricity to ~3.5 million customers in New York City and Westchester (plus ~300,000 in southeastern NY / northern NJ).
• Natural gas to ~1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester.
• Steam to ~1,555 customers in Manhattan (a genuinely unusual district-steam franchise).

This is a rate-regulated business: a state commission sets the allowed return on the company's invested "rate base," which is the core driver of earnings. Fiscal year ends December 31.

Revenue mix (FY2025, from filings — seg_prod):

• Electricity $12.60B (74%) · Oil & gas purchased $3.61B · Steam $0.70B · Non-utility products & services $0.003B.
• Electricity is the overwhelming driver; the tiny non-utility line reflects Con Ed's earlier exit from its clean-energy development businesses, leaving an almost-pure regulated pure-play.
• Geography: FMP provides no geographic segmentation (seg_geo empty) — but functionally the entire franchise is New York State, one of the most demanding regulatory and highest-cost service territories in the country. That concentration is both a moat (a protected monopoly franchise) and the single largest risk (one regulator sets the whole return).

2. The expert thesis — why the panel is bullish (traceable)

There is no expert coverage of ED in the Synthos knowledge base. total_claims = 0, net_bullish_voices = 0, and the top claim list is empty. None of the investor-panel voices Synthos tracks have said anything traceable about Consolidated Edison.

That is an honest and common outcome for a low-beta regulated utility: it is not the kind of name that shows up in high-conviction investor podcasts. We therefore make no expert-conviction claim, cite no claim_ids (there are none to cite), and drive this verdict entirely from fundamentals, valuation, and quant. Any bullishness you read below is ours, derived from the numbers — not borrowed from a panel we do not have.

3. Synthos scores & the Bull / Base / Bear cases

The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):

The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. The cases bound the range; the scores above summarize them.

Synthos fair value = the base case, ~$108 (−5%), with the full $88–$124 span as the honest range. Our base sits essentially on top of the Street's $107.75 consensus — for a regulated utility whose earnings are set by a formula, the Street and a disciplined DCF converge, and both say the stock is modestly above fair value today. This is a tracked call; the Forecaster Scorecard grades it once it matures.

4. Exponential Potential

Synthos separates compounders (durable high returns on capital) from exponentials (accelerating multi-baggers-from-here). ED is neither — it is a low-growth, regulated income vehicle:

• Forward growth: revenue CAGR FY25→FY30E ~3.0% ($16.9B → $19.6B); EPS CAGR ~6.6% ($5.66 → $7.79E). Slow and steady.
• Acceleration (the 2nd derivative) is roughly flat: EPS growth is a smooth ~6–7% each year with no inflection — the estimate curve is a straight line, which is exactly what a rate-base utility should produce.
• Room to run: none in the exponential sense. The franchise is a fixed, regulated NY territory; there is no TAM to conquer. Growth comes only from rate-base investment the regulator allows.
• Reinvestment runway: paradoxically large in dollars (multi-billion annual capex into the grid, electrification-driven load growth) — but it is regulated-return reinvestment (~9% ROE), not high-ROIC compounding, and it is funded partly by new debt and equity.

Exponential Potential: Very Low (1/10). Own ED — if at all — for the ~3% dividend, the 52-year raise streak, and portfolio ballast. Do not own it for capital appreciation beyond low-single-digit-plus-dividend total returns.

5. Financials (real numbers — FMP annual/quarterly)

• Revenue: FY25 $16.92B, +10.9% (FY24 $15.26B, +4.2% on FY23 $14.65B). The FY25 bump partly reflects commodity pass-through (oil & gas purchased), not underlying growth — utility revenue is a noisy top line.
• Earnings: GAAP net income $2.02B FY25 (EPS $5.66); FY24 $1.82B ($5.26). Note FY23's $7.24 EPS was inflated by one-time gains (clean-energy business sale). Q1'26 EPS $2.55 GAAP / $2.18 adjusted (management's number).
• Margins: gross ~65% TTM, EBITDA margin ~40%, net margin ~12.5% TTM — typical utility economics.
• Returns on capital: ROE ~8.8% TTM, ROIC ~3.2%, ROA ~2.9%. These are low — the regulated model produces reliable but modest returns.
• Cash flow (the honest weak spot): operating CF ~$4.8B FY25, capex ~−$4.76B, leaving free cash flow of only ~$36M — and FCF was negative in FY22–FY24 (−$0.2B, −$2.3B, −$1.2B). ED does not self-fund its growth capex plus dividend; it funds the gap with debt and equity issuance (a $776M equity forward in Feb 2026, per the earnings release). This is normal for a growth-capex utility but is a real dilution/leverage watch-item.
• Balance sheet: total debt $28.8B, net debt $27.1B, net-debt/EBITDA ~3.9× — investment-grade but meaningfully levered; interest coverage a thin ~1.4×. Management notes no long-term holding-company debt (debt sits at the operating utilities).

6. Valuation — priced in or room?

At 19.1× trailing EPS, 4.0× EV/sales, 9.9× EV/EBITDA, ED is priced roughly in line with — to a touch above — its own history and the regulated-utility peer group. The forward P/E path is 18.7× (FY26E) → 17.6× (FY27E) → 14.6× (FY30E), so the multiple compresses gently as EPS grinds higher, but there is no cheap entry here. Key reads:

• PEG is unattractive: trailing PEG ~2.0× and forward PEG ~3.1× (FMP) — you are paying a growth-stock PEG for a no-growth utility, which only makes sense if the ~3% dividend + defensiveness is the point.
• Dividend: yield ~3.05%, payout ratio ~55% of earnings — well-covered on earnings, though not covered by free cash flow (see §5). The 52-year raise streak is the real product.
• Price-to-book 1.6×, price/fair-value (FMP) 1.6× — a premium to book that regulated utilities typically hold.
• Street targets (context): consensus $107.75, high $118, low $97. The stock ($114) trades above the average analyst target, and the grade distribution (0 Strong Buy, 2 Buy, 18 Hold, 7 Sell) is a clear Hold/Sell tilt — the Street is not chasing it here.

Our ~$108 base-case fair value lands right on consensus. Not cheap; modestly above fair value. A quality bond-proxy at a slightly full price — hence Watch.

7. Technicals (from the tech block)

• Trend: up. $114 sits above the 50-DMA ($107.84) and 200-DMA ($105.00), and the 50 is above the 200 (golden-cross posture). MACD +1.39 (positive).
• Location: just −1.3% off the 52-week high ($115.46), +19% off the 52-week low ($95.41) — a defensive name near highs, minimal drawdown (max −1.3% from peak).
• Momentum: RSI(14) 74.6 — overbought (>70). This is a genuine stretched-entry warning: buying here means buying into a short-term overbought condition near the 52-week high.
• Relative strength: ED +13.1% 12-mo vs SPY +20.6% and QQQ +30.3% — it has lagged the market over 12 months (as low-beta defensives typically do in an up-tape), though it outran SPY over the last 3 months (+7.0% vs... SPY +13.7%; actually lagged 3-mo too). Net: a defensive laggard, not a leader.
• Read: technicals say wait. Overbought RSI near the 52-week high argues against initiating; a pullback toward the rising 50-DMA (~$108, which is also our fair value) would be a lower-risk entry.

8. Moat & competitive position

ED's moat is a regulated monopoly franchise: no competitor can string a second set of wires under Manhattan, and the barriers (regulatory, capital, right-of-way) are effectively absolute within its territory. Management touts nation-leading electric reliability (best-in-class SAIFI/SAIDI vs proxy peers) and a 200-year operating track record. The flip side of the monopoly is that the regulator — not competition or the market — sets the allowed return, so the "moat" caps the upside as much as it protects the downside.

Peer set (regulated electric/multi-utilities, market cap): Entergy (ETR) $52.7B, PSEG (PEG) $40.7B, WEC Energy $38.7B, PG&E (PCG) $37.5B, DTE $32.0B, Ameren (AEE) $31.8B, Fortis (FTS) $29.5B, FirstEnergy (FE) $28.1B, Eversource (ES) $28.0B, CMS Energy $24.0B. ED sits among the larger regulated names; it trades at a similar-to-slightly-premium multiple, justified by its low beta, reliability record, and dividend-aristocrat status rather than by superior growth.

9. Management, capital allocation & guidance

• Capital allocation: disciplined and utility-standard — heavy regulated capex into the grid (electrification-driven load growth), a well-defended dividend (52nd straight annual increase, +4.4% latest), and equity/debt issuance to fund the capex-plus-dividend gap. No buyback of note; a $776M equity forward (Feb 2026) is a mild dilution flag.
• Insider activity: the recent Form-4 flow (insider) is almost entirely director stock awards (routine comp), plus a small officer purchase (VP & Controller, ~$107, June 2026) and a director award. No cluster of discretionary insider selling — a clean, unremarkable read.
• Management's own guidance (half-weighted — their self-interested words): the SEC 8-K earnings release (1Q'26, filed 2026-05-07) is a real earnings presentation and does contain dated forward guidance. Management reaffirmed 2026 adjusted EPS guidance of $6.00–$6.20 (non-GAAP), framed the investment thesis as "durable, steady, and reliable," and cited an 8.8% regulated-investment-base five-year CAGR, three years of rate certainty for CECONY electric & gas, electrification-driven load growth (20–25% higher electric demand from new buildings; 9–13 new substations planned 2026–2034), and no long-term holding-company debt. Treat this as management talking its own book (half-weight): the guidance is credible and consistent with the regulated model, but it is, by design, the optimistic framing.

10. Catalysts & what to watch

• Next earnings: 2026-08-06 (Q2'26; Street EPS $0.76, revenue ~$3.46B — note Q2 is a seasonally low quarter for a NY utility). Watch for reaffirmation of the $6.00–$6.20 FY26 adjusted-EPS guide.
• Rate cases: the single biggest earnings driver — outcomes on allowed ROE and rate-base recovery for CECONY and O&R. A constructive/adverse ruling moves the whole thesis.
• Interest rates: as a bond-proxy, ED re-rates inversely to long rates. Falling rates = tailwind; rising rates = de-rating.
• Capex / FCF gap: whether the electrification build stays on plan and how much new equity is required to fund it (dilution watch).
• Dividend: continuation of the 52-year raise streak (the reason most holders own it).

Thesis tripwires (what would change the call): an unfavorable rate-case decision; a dividend-growth pause (would break the core reason to own it); net-debt/EBITDA drifting above ~4.5×; or a sustained spike in long rates that de-rates the whole sector.

11. Key risks

• Regulatory / rate-case (structural, #1): a New York commission sets the allowed return on the entire franchise. An adverse rate plan directly caps earnings — the return is politically and administratively determined, not market-determined.
• Leverage & negative free cash flow: 3.9× net-debt/EBITDA, ~1.4× interest coverage, and FCF that has been near-zero-to-negative for years mean the growth-plus-dividend is partly debt/equity funded — a dilution and refinancing risk if rates stay high.
• Interest-rate sensitivity: as a low-beta bond-proxy, ED is vulnerable to rising long rates even if operations are flawless.
• Valuation: trading above both our fair value and the Street's average target, with a Hold/Sell analyst tilt — limited margin of safety at $114.
• Single-territory concentration: the entire business is New York State — one regulator, one economy, one weather/climate exposure (storm-hardening costs, climate-driven capex).
• No expert corroboration: unlike our conviction names, there is zero independent panel coverage to cross-check the thesis — this call rests entirely on the quant/fundamentals.

12. Verdict, position sizing & monitoring

Watch. Consolidated Edison is exactly what it appears to be: a rock-steady, ultra-low-beta (0.27) regulated NY utility with a 52-year dividend-raise streak and highly predictable ~6–7% EPS growth. It is a legitimate defensive income holding — but at $114 it trades above our ~$108 fair value and above the Street's $107.75 target, with an overbought RSI (74.6) near its 52-week high and a Hold/Sell-tilted analyst panel. There is no margin of safety and no expert conviction to lean on, so the honest verdict is Watch, not Buy.

• Sizing: if held, a defensive income sleeve, ~1–3% — ballast, not a growth position. We would want a pullback below ~$108 (toward the rising 50-DMA, which coincides with fair value) before initiating.
• Monitoring: re-underwrite on rate-case outcomes and each earnings print; watch the FCF/equity-issuance gap and the dividend-growth streak. This verdict is logged as a tracked Synthos call as of 2026-07-03 at $113.99.
• Single biggest risk: New York rate-case / regulatory outcomes — the regulator, not the market, sets this company's return.

Provenance & disclosures

• Traceability: 0 KB claims, breadth 0 — there is no expert coverage of ED in the Synthos knowledge base, so no claim_ids are cited (none exist). This verdict is explicitly fundamentals- and quant-driven; fabricated conviction is structurally impossible (and there was none to borrow).
• Data as-of: fundamentals 2026-03-31 (Q1'26) · estimates & prices 2026-07-02/03 · management guidance from the SEC 8-K earnings release filed 2026-05-07. Forward figures are analyst consensus (FMP) or management guidance, labeled as estimates.
• Management caveat: the $6.00–$6.20 FY26 adjusted-EPS guide and the 8.8% rate-base CAGR are management's own words, half-weighted by design.
• Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
• Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").