Consolidated Edison Stock Discussion

Consolidated Edison's forecasted 7.0% annualised revenue growth to the end of 2024 is faster than its historical growth of 5.6% p.a. over the past five years and is expected to outpace the wider industry's forecasted growth of 3.3% per year.

Consolidated Edison's low P/E ratio is due to its forecast for declining earnings. Shareholders accept this as they expect no pleasant surprises in future earnings, implying a stagnant share price.

The mix of low ROE and high debt is unattractive. Consider a company's performance without easy borrowing, as credit markets fluctuate. High-quality firms usually have high ROE and low debt. Future profit growth and required investment should also be considered.

Despite steady reinvestment, Consolidated Edison's unchanged ROCE and increased capital indicates ineffective funds deployment into high-return investments. Hence, multiplying the current value seems unlikely despite prior stock price rise.