EXC's been bouncing around a lot this past year, but if you zoom out a bit, it’s mostly been rangebound between about 43 and 49. Sure, we had that pop to almost 50 in March, but every time it gets up there, it seems to pull back. Right now it’s at 45.75, which is sort of in the middle. I’m leaning bearish here in the medium term, looking for a move down to 41.00.
The big thing on my mind is how utility stocks like this one get treated when there’s even a hint of higher rates sticking around. There’s no real growth story here and with yields still elevated, the “safe” dividend angle just isn’t as protective as people hope. Plus, the cost structure for these guys has been getting squeezed by higher maintenance and regulatory expense. That doesn’t show up quarter to quarter, but it grinds down margins over time.
One thing that could swing things fast though: if power demand from a summer heatwave is crazy high, there’s a chance earnings get a short term boost. I just think the market’s already baked in a lot of the defensive play, and there’s more downside risk if they guide down or rates push higher.
I’d say the main risk to shorting or avoiding here is if the Fed reverses course hard on rates, EXC could easily snap right back to the upper end of the range. But as things stand, I’m more comfortable waiting this out. Target price is 41.00, so not a huge downside, but enough for a slow burn trade like this.
