Value
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.7 |
| P/S | 8.3 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 7.1 |
| PEG | 3.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.7x
- ▸PEG: 2.68
DUK · Why this verdict
Why Duke Energy Corporation (Holdin (DUK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Duke Energy is a regulated utility with a perfect four-quarter earnings beat streak and positive price momentum, but the stock has moved above its near-term resistance level, free cash flow is negative, and the dividend safety is flagged — the setup does not support a new entry at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten earnings estimates in each of the last four reported quarters, with the most recent quarter coming in roughly 7% above consensus — a clean execution record that signals operational discipline in a regulated environment. Catalyst breakdown | The beat streak extends to five consecutive quarters with the next report meeting or exceeding consensus. | →Stable |
| CounterRegulated utility earnings are partially a function of weather and rate timing; a reversion to normal weather or an unfavorable interim rate case outcome could end the streak without reflecting any change in the underlying business. | ||
The stock is trading above its take-profit resistance target, with the reward-to-risk ratio now negative — downside to the stop level outweighs the available headroom above the current price, making this an unfavorable entry point. Price targets | A pullback re-establishes a positive reward-to-risk ratio above 1.0, or the take-profit target is raised sufficiently to restore meaningful upside. | →Stable |
| CounterWhen a stock prints above resistance on accumulating volume, the resistance level itself becomes support; a breakout continuation could render the current technical ceiling irrelevant if the next catalyst is strong enough. | ||
Free cash flow is negative at negative 44% relative to net income, meaning reported earnings are not translating into real cash and the company likely relies on debt markets to fund both its capital program and its dividend distribution. Quality breakdown | Free cash flow turns positive on a trailing-twelve-month basis, reducing reliance on external financing for ongoing operations. | →Stable |
| CounterA regulated utility with long-lived rate-base assets routinely carries negative FCF during heavy build-out phases; if rate-case approvals are secured, the regulated return on the expanded base can eventually close the gap. | ||
The data flags a yield trap warning — the dividend yield appears high but the dividend may not be safely covered, a concern compounded by the negative free cash flow that limits the company's ability to fund distributions from operations. Catalyst breakdown | Free cash flow rises to cover the dividend on a trailing-twelve-month basis, and the yield trap flag is lifted in a subsequent analysis cycle. | →Stable |
| CounterRegulated utilities can sustain dividends through rate-base financing for extended periods if regulators allow cost recovery; if the next rate case delivers a favorable outcome, cash coverage could improve without requiring a dividend cut. | ||
The company has beaten earnings estimates in each of the last four reported quarters, with the most recent quarter coming in roughly 7% above consensus — a clean execution record that signals operational discipline in a regulated environment.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to five consecutive quarters with the next report meeting or exceeding consensus.
CounterRegulated utility earnings are partially a function of weather and rate timing; a reversion to normal weather or an unfavorable interim rate case outcome could end the streak without reflecting any change in the underlying business.
The stock is trading above its take-profit resistance target, with the reward-to-risk ratio now negative — downside to the stop level outweighs the available headroom above the current price, making this an unfavorable entry point.
→StablePrice targets
- Expectation
- A pullback re-establishes a positive reward-to-risk ratio above 1.0, or the take-profit target is raised sufficiently to restore meaningful upside.
CounterWhen a stock prints above resistance on accumulating volume, the resistance level itself becomes support; a breakout continuation could render the current technical ceiling irrelevant if the next catalyst is strong enough.
Free cash flow is negative at negative 44% relative to net income, meaning reported earnings are not translating into real cash and the company likely relies on debt markets to fund both its capital program and its dividend distribution.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive on a trailing-twelve-month basis, reducing reliance on external financing for ongoing operations.
CounterA regulated utility with long-lived rate-base assets routinely carries negative FCF during heavy build-out phases; if rate-case approvals are secured, the regulated return on the expanded base can eventually close the gap.
The data flags a yield trap warning — the dividend yield appears high but the dividend may not be safely covered, a concern compounded by the negative free cash flow that limits the company's ability to fund distributions from operations.
→StableCatalyst breakdown
- Expectation
- Free cash flow rises to cover the dividend on a trailing-twelve-month basis, and the yield trap flag is lifted in a subsequent analysis cycle.
CounterRegulated utilities can sustain dividends through rate-base financing for extended periods if regulators allow cost recovery; if the next rate case delivers a favorable outcome, cash coverage could improve without requiring a dividend cut.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.2 |
| ROA | 1.9 |
| Gross margin | 6.2 |
| Op margin | 10.0 |
| Net margin | 7.9 |
| Current ratio | 2.6 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Strong margins: 16%
- ▸Earnings quality RED FLAG: -44% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.3 |
| EPS growth | 4.4 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.4 |
| Price target | 6.2 |
- ▸LLM news sentiment: +0.40 (n=1)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $2,925,425 (0.003% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 5.5 |
| growth rank | 7.2 |
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.0 |
| 52w position | 9.1 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 5.8 |
| volatility | 7.9 |
| put call | 8.5 |
| implied vol | 7.6 |
| beta | 10.0 |
| debt equity | 3.8 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.7 |
| dividend safety | 4.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:39d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.44
Upside
-2.7%
Downside
6.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.44 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.5, Sentiment at 6.9, and Momentum at 6.8; the weakest are Technical at 3.1, Growth at 4.8, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.44 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The company has beaten earnings estimates in each of the last four reported quarters, with the most recent quarter coming in roughly 7% above consensus — a clean execution record that signals operational discipline in a regulated environment.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2The stock is trading above its take-profit resistance target, with the reward-to-risk ratio now negative — downside to the stop level outweighs the available headroom above the current price, making this an unfavorable entry point.
Trip ifPrice pulls back more than 8% from the current level, re-establishing a reward-to-risk ratio above 1.5.
- P3Free cash flow is negative at negative 44% relative to net income, meaning reported earnings are not translating into real cash and the company likely relies on debt markets to fund both its capital program and its dividend distribution.
Trip ifFree cash flow remains below -20% of net income for 3 consecutive quarters.
- P4The data flags a yield trap warning — the dividend yield appears high but the dividend may not be safely covered, a concern compounded by the negative free cash flow that limits the company's ability to fund distributions from operations.
Trip ifDividend is cut by more than 15% — confirming the yield-trap scenario.