Jefferies Views Exelon as Fairly Valued (EXC)

Jefferies is out with its research report today on Exelon (NYSE: EXC) in which it views EXC as fairly valued based on account pricing upside from improving capacitiy values and the likilihood of legislation restricting carbon emissions.

In a note to clients, Jefferies writes, "The $42.50 price target is based on our revised sum of the parts analysis. For Exelon's utility operations, we are using a P/E analysis, which based on a 2012 average multiple of 12.7 times results in a utility price target of $11.50. Using EV/EBITDA on Exelon's merchant business, we arrive at a merchant only price target of $31.00 price target based on a 13.5 multiple of unhedged EBITDA and a combined company price target of $42.50. Based on yesterday's closing price of $39.44, this would result in 12-month price appreciation and total return potential of 7.8% and 13.1%, respectively, including the company's current dividend yield of 5.3%."

Jefferies maintains its Hold rating on EXC.

EXC closed yesterday at $39.44.