Value
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.7 |
| P/S | 8.7 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 7.1 |
| PEG | 3.7 |
| Analyst target | 3.0 |
- ▸Forward P/E: 17.6x
- ▸PEG: 3.05
ED · Why this verdict
Why Consolidated Edison (ED) 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 score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business faces two simultaneous high-severity concentration risks — a single state regulator controls the majority of authorized returns, and a single metropolitan area drives the bulk of demand — leaving the company especially vulnerable to adverse rate-case decisions or local economic shocks. Bear case | Quarterly EPS consistently exceeds $2.27 for 3 consecutive quarters — above the level at which the company most recently missed — demonstrating that concentrated regulatory and geographic exposure has not constrained earnings recovery. | →Stable |
| CounterA monopoly utility in the country's largest city is unlikely to face existential regulatory risk; regulators and utilities are mutually dependent, and a constructive long-term rate-case history can make concentrated franchise exposure a stability feature rather than a vulnerability. | ||
Free cash flow is negative — running at -39% relative to net income — meaning the utility is not converting reported earnings into cash; for a business that depends on steady cash generation to fund its dividend and capital reinvestment program, this is a meaningful structural concern. Quality breakdown | Free cash flow turns positive and represents at least 50% of net income for 2 consecutive fiscal years. | →Stable |
| CounterRegulated utilities are capital-intensive by design and routinely fund infrastructure through debt rather than operating cash flow; negative FCF in a rate-regulated environment may reflect a constructive infrastructure investment cycle, with future rate increases designed to recover the capital deployed over time. | ||
The stock is currently trading above the analyst consensus take-profit target, meaning the conventional upside case has been realized and the risk/reward has flipped — there is no remaining headroom to the target, only downside risk to a meaningful correction. Price targets | Analyst consensus target is raised above $120.00 over the next 12 months, restoring meaningful upside from current prices. | →Stable |
| CounterUtility stocks frequently trade above near-term analyst targets during periods of elevated demand for yield and rate-sensitive assets; if interest rates decline, target re-ratings and multiple expansion can push prices and targets higher in tandem, making the current premium less durable as a negative signal. | ||
The dividend carries a specific yield trap warning — flagging the payout as high but potentially uncovered — suggesting the income story that typically attracts utility investors may rest on a less secure foundation than the headline yield implies. Catalyst breakdown | Annual EPS exceeds $7.00 for 2 consecutive fiscal years, providing coverage above current reported earnings levels and demonstrating the dividend is well-supported. | →Stable |
| CounterMany regulated utilities have maintained dividends through capital investment cycles as regulators allow earnings recovery in subsequent rate periods; the current negative FCF may be a transient phase rather than a permanent impairment of payout capacity. | ||
The business faces two simultaneous high-severity concentration risks — a single state regulator controls the majority of authorized returns, and a single metropolitan area drives the bulk of demand — leaving the company especially vulnerable to adverse rate-case decisions or local economic shocks.
→StableBear case
- Expectation
- Quarterly EPS consistently exceeds $2.27 for 3 consecutive quarters — above the level at which the company most recently missed — demonstrating that concentrated regulatory and geographic exposure has not constrained earnings recovery.
CounterA monopoly utility in the country's largest city is unlikely to face existential regulatory risk; regulators and utilities are mutually dependent, and a constructive long-term rate-case history can make concentrated franchise exposure a stability feature rather than a vulnerability.
Free cash flow is negative — running at -39% relative to net income — meaning the utility is not converting reported earnings into cash; for a business that depends on steady cash generation to fund its dividend and capital reinvestment program, this is a meaningful structural concern.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and represents at least 50% of net income for 2 consecutive fiscal years.
CounterRegulated utilities are capital-intensive by design and routinely fund infrastructure through debt rather than operating cash flow; negative FCF in a rate-regulated environment may reflect a constructive infrastructure investment cycle, with future rate increases designed to recover the capital deployed over time.
The stock is currently trading above the analyst consensus take-profit target, meaning the conventional upside case has been realized and the risk/reward has flipped — there is no remaining headroom to the target, only downside risk to a meaningful correction.
→StablePrice targets
- Expectation
- Analyst consensus target is raised above $120.00 over the next 12 months, restoring meaningful upside from current prices.
CounterUtility stocks frequently trade above near-term analyst targets during periods of elevated demand for yield and rate-sensitive assets; if interest rates decline, target re-ratings and multiple expansion can push prices and targets higher in tandem, making the current premium less durable as a negative signal.
The dividend carries a specific yield trap warning — flagging the payout as high but potentially uncovered — suggesting the income story that typically attracts utility investors may rest on a less secure foundation than the headline yield implies.
→StableCatalyst breakdown
- Expectation
- Annual EPS exceeds $7.00 for 2 consecutive fiscal years, providing coverage above current reported earnings levels and demonstrating the dividend is well-supported.
CounterMany regulated utilities have maintained dividends through capital investment cycles as regulators allow earnings recovery in subsequent rate periods; the current negative FCF may be a transient phase rather than a permanent impairment of payout capacity.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The stock has traded past its analyst consensus target, leaving negative implied upside from current levels; a recent earnings miss, deeply negative free cash flow, a high yield flagged as potentially uncovered, and concentrated exposure to a single state regulator and metropolitan area combine to produce an unfavorable risk/reward that supports reducing the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 2.1 |
| Gross margin | 6.6 |
| Op margin | 10.0 |
| Net margin | 6.3 |
| Current ratio | 4.6 |
| FCF quality | 0.0 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -39% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
| EPS growth | 4.6 |
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Overbought (RSI 75)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.5 |
| erm sentiment | 4.8 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $107 (0.000% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 3.2 |
| growth rank | 3.8 |
Technical
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.1 |
| 52w position | 9.8 |
| gap | 5.0 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 5.4 |
| volatility | 8.3 |
| put call | 10.0 |
| implied vol | 5.1 |
| beta | 10.0 |
| debt equity | 4.9 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.7 |
| dividend safety | 4.8 |
- ▸Strong earnings: 3B/1M
- ▸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 (6)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.3=NEGATIVE
Warning (1)
- 8K_FLAG:1.02
Reward-to-Risk
-1.30
Upside
-12.8%
Downside
9.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.7 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 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.30 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.3, Momentum at 7.2, and Value at 5.5; the weakest are Technical at 3.7, Growth at 4.3, and Peer rank at 4.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.30 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Stock Above Analyst Target
Trip ifUpside to analyst consensus target exceeds 10% through a lower stock price or a higher consensus estimate.
- P2Regulatory Geographic Concentration
Trip ifQuarterly EPS exceeds $2.27 for 3 consecutive quarters, recovering above the level the company most recently missed.
- P3Negative Free Cash Flow Earnings Quality
Trip ifFree cash flow rises above $0 for 2 consecutive fiscal years.
- P4Dividend Yield Trap Risk
Trip ifAnnual EPS exceeds $7.00 for 2 consecutive fiscal years.